April 22, 2022

6th Fiscal Period (Ended February 2022)
Financial Results Briefing Materials

AssetManagement
CompanySANKEI REAL ESTATE Inc.

This page intentionally left blank.

SANKEI REAL ESTATE Inc.

Table of Contents
Disclaimer

Executive Summary… P3

1. Financial Results andManagement Highlights… P4

2. External Growth Results and Strategy… P15

2-1 External Growth Results…P16

2-2 External Growth Strategy…P17

3. Internal Growth Results and Strategy
3-1 Internal Growth Results…P22

3-2 Internal Growth Strategy

…P25

… P21

4. Financial Strategy… P28

5. ESG Initiatives… P31

Appendix… P35

This document is intended for the purpose of providing information on
SANKEI REAL ESTATE Inc. (hereinafter, “SANKEI REAL ESTATE”), and is notintended for the purpose of soliciting investment in or recommending the
trading of specific products. Please consult your securities company for any
purchase of SANKEI REAL ESTATE investment units. When making any
investment, investors do so at their sole discretion and risk. The
information provided in this document is an analysis or a judgment madeby Sankei Building Asset Management Co., Ltd. (hereinafter, “Sankei
Building Asset Management”) based on information currently available toSankei Building Asset Management, and Sankei Building Asset Management
does not guarantee and is not liable whatsoever for the accuracy, reliability,
integrity, etc. thereof. In addition, the content may be changed orabolished without prior notice. The content of this document contains
earnings forecasts and other forward-looking statements. These forwardlooking statements are not a guarantee of future business performance or
financial content of SANKEI REAL ESTATE. All rights to any part of thisdocument belong to Sankei Building Asset Management, and no part of thisdocument shall be used, cited, reproduced, altered, disassembled,transmitted, etc. by any means, electronic or mechanical, for any purpose
without permission. This document is not a disclosure document based on
the Financial Instruments and Exchange Act. Please contact below if you
have any inquiries concerning this document.
Sankei Building Asset Management Co., Ltd.

Finance & IR Department
Phone: +81-3-5542-1316

2

SANKEI REAL ESTATE Inc.

Executive Summary
Financial Results and Management Highlights

 In the 6th FP, revenue and profit increased compared with the forecast and from the previous fiscal period
・ Operating revenue: +0.1% from the forecast, +27.7% from the previous fiscal period
・ Operating profit: +0.9% from the forecast, +35.0% from the previous fiscal period Acquired 4 new properties through capital increase through public offering (Sep. 2021)
・ Asset size: 96.6 billion yen (+ 25.1 billion yen, +35.1% compared with before) DPU* for the 6th FP increased to 2,979 yen (+21 yen from the forecast, +117 yen from the previous fiscal
period) Acquired BELS evaluation for two sub assets (hotels) (Dec. 2021)
Future Growth StrategiesExternal growth and internal growth that enable sustained growth of DPU
 Continue to implement diversified investment conscious of the portfolio matrix
 Continue to seek room for internal growth and reduce risk of internal degeneration
 Handling of emerging risks of internal degeneration

Enhancement of sustainability promotion systemDisclosure of ESG benchmarks (improvement of disclosure)Plans to support the TCFD (Task Force on Climate-Related Financial Disclosures)
recommendations* “DPU” refers to distribution per unit. The same applies below.

3

SANKEI REAL ESTATE Inc.

1. Financial Results and Management Highlights

4

SANKEI REAL ESTATE Inc.

Financial Results Highlights– Operating revenue and operating profit increased from the forecast and the previous fiscal period – Operating revenue increased in the 6th FP, +0.1% compared with the forecast and +27.7% from theprevious fiscal period
 Operating profit increased in the 6th FP, +0.9% compared with the forecast and +35.0% from the previous
fiscal period
 DPU* for the 6th FP increased by +21 yen from the forecast and +117 yen from the previous fiscal period■ Financial Summary for 6th Fiscal Period (Ended February 2022)
Results

Comparison with forecast

2,778 million yen
1,540 million yen
1,391 million yen
2,979 yen

Operating revenue
Operating profit
Net profit
DPU (distribution per unit)+0.1% +2 million yen+0.9% +14 million yen+0.7% +9 million yen+0.7%+21 yen■ Change in DPU for 6th FP (Ended February 2022)
3,000 yen
2,900 yen

2,849 yen

20 yen2,800 yen

2,842

2,600 yen
2,500 yen
2,400 yen

+0.7%

+3.4%

+0.5%

2,700 yen～～
4th FP
Results+27.7% +602 million yen+35.0% +398 million yen+37.2% +377 million yen+4.1%+117 yen

2,979 yen (Unit: yen per unit)

2,958 yen

Distributions in excessof earnings
2,862 yenComparison with previous
fiscal period

5th FP
Results

6th FP Forecasts(As of October 2022)

6th FP
Results

5th FP → 6th FP
increase in DPU
2,862 yen → 2,979 yen
Increase of 117 yen(+4.1%)
5SANKEI REAL ESTATE Inc.

Financial Results Highlights– Summary of DPU for the 6th FP (Ended February 2022) (Comparison with Previous Fiscal Period)

 DPU for the 6th FP: 2,979 yen (+4.1% from the previous fiscal period) The effect of the increase in revenue caused by the acquisition of 4 properties exceeded the factors
reducing rent revenue of existing properties, resulting in an increase from the previous fiscal period■ Summary of DPU for 6th FP (Ended February 2022)(yen per unit)
Comparison with previous
fiscal period+117 yen(+4.1％)

Change in rental
revenue, etc.

2,862
Distributions
in excess of 20
earnings

2,842

Effects ofpropertyacquisition

Change in
expenses related
to leasing
business

Change in otheroperatingexpenses

Change in nonoperating
income (loss)

Main breakdown- Outsourcing expenses -55- Utilities expenses -28- Depreciation -16- Repair expenses +28[Reference] Impact of the COVID-19
pandemic～～
5th FP Result

Comparison
with previous
fiscal period
ChangeBreakdown ofDPU

6th FP
ResultOffice revenue
Store revenue
Rentalconference room
revenue
Total DPU

0 yen
-15 yen

0 yen-2 yen-5 yen+3 yen-20 yen+1 yen6th FP Result

6

SANKEI REAL ESTATE Inc.

Financial Results Highlights (Comparison with Forecast) 6th Fiscal Period (Ended February 2022)

 Operating revenue (+0.1%) and operating profit (+0.9%) both increased from the forecasts(Unit: million yen)Accounting period
Operating revenue
Rental and CAM revenue

6th FP Forecasts (A)(as of October 2021)

6th FP Results (B)(February 2022)

Difference(B)-(A)

Major Factors for the Difference

2,775

2,778

2

2,613

2,615

2 - Toyo Park accrual of rent (+3), other

Parking revenue

35

34

(0)

Utilities reimbursement

120

119

(0)

Other revenue

7

7

(0)

Operating expenses

1,249

1,237

(11)

Expenses related to leasing
business [Total]

980

972

(7)

Outsourcing expenses

223

224

0

Utilities expenses

143

162

19 - Increase in electricity charges (Shinagawa (+7), BREEZÉ (+6), Hatchobori (+2), other)

Repair expenses

5836(22) - No repair works implemented (BREEZÉ (-18), Hatchobori (-3))

Property taxes

222

220

(1)

Depreciation

309

306

(2)

Other expenses

23

22

(0)

Operating income (loss) fromleasing

1,795

1,805

10

Total other operating expenses

269

265

(3)

Asset management fee

210

210

0

Other expenses

58

54

(4)

Operating profit

1,526

1,540

14

Non-operating income

0

0

0

Non-operating expenses

143

148

4

Ordinary profit

1,382

1,392

9

Net profit

1,381

1,391

9

2,958 yen

2,979 yen

21 yenDistribution per unit (Unit: yen)

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SANKEI REAL ESTATE Inc.

Financial Results Highlights (Comparison with Previous Fiscal Period)
6th Fiscal Period (Ended February 2022)

 Operating revenue (+27.7%) and operating profit (+35.0%) both increased from the beginning-of-period
forecasts due to the acquisition of 4 properties Revenue and profit increased(Unit: million yen)Accounting period

Operating revenue

5th FP Results (A)(August 2021)

6th FP Results (B)(February 2022)

Difference(B)-(A)

Major Factors for the Difference

2,176

2,778

602

2,032

2,615

582 - Property acquisition (+615), BREEZÉ (+5), Toyo Park cancellation (-27), Hatchobori rent reduction (-5), etc.

Parking revenue

31

34

3 - Property acquisition (+4)

Utilities reimbursement

89

119

30 - Property acquisition (+28), etc.

Other revenue

22

7

Operating expenses
Expenses related to leasing
business [Total]

1,034

1,237

203

793

972

178

Outsourcing expenses

169

224

54 - Property acquisition (+35), leasing incentive, etc. (+17) (Toyo Park (+14), Hibiya (+3))

Utilities expenses

116

162

45 - Property acquisition (+35), BREEZÉ (+4), Omori (+2), other

Repair expenses

3936(3) - Property acquisition (+7), existing buildings (-10) (Shinagawa (-11), SG NIHONBASHI (-3), Toyo Park (+3), other)

Property taxes

223

220

(2)

Depreciation

228

306

78 - Property acquisition (+72), Shinagawa and other (+6)

16

22

6 - Property acquisition (+6) (insurance premiums (+2), trust fee (+1), other (+3))

1,382

1,805

423

Total other operating expenses

241

265

24

Asset management fee

195

210

15 - Property acquisition (+19), existing buildings (-4)

Rental and CAM revenue

Other expenses
Operating income (loss) fromleasing

Other expenses(15) - (Previous FP) Toyo Park cancellation penalty (-17)

45

54

8

1,141

1,540

398

Non-operating income

1

0

(0)

Non-operating expenses

127

148

Ordinary profit

1,014

1,392

377

Net profit

1,014

1,391

377

2,862 yen

2,979 yen

117 yenOperating profit

Distribution per unit (Unit: yen)

20 - Interest expenses (+21), borrowing-related expenses (-10), amortization of investment unit issuance expenses (+6), other8

SANKEI REAL ESTATE Inc.

Management Highlights (External Growth)– Acquired 4 Properties in September 2021 (25.1 billion yen) – Continued steady external growth with sense of speed, with asset size increasing to approx. 100 billion yen
Acquisition for23.9 billion yen (4 properties)
BREEZÉ TOWER

Acquisition for25.1 billion yen (4 properties)

Shinagawa TS
Tower

Hitachi Kyusyu
Building

Shinagawa TS
Tower

Start of Phase 2 to
mid-term target

Acquisition for
4.2 billion yen

1,200億円

200 billion yen to
300 billion yen

S-GATE AKASAKA
Omori Park
Building(billion yen)

S-GATE AKASAKAIG Hiroshima

Miyazakidai
Garden96.6 billion yen

1,000億円
100

80
800億円

71.4 billion yen

67.2 billion yen
60
600億円

43.3 billion yen

Sponsor support rate 100%

40
400億円

0
200億円

～
～
August 2019(End of 1st FP)

February 2020
(End of 2nd FP)

August 2020
(End of 3rd FP)

February 2021
(End of 4th FP)

August 2021
(End of 5th FP)

February2022
February
2022
(End
(End
of 6thof 6thFP) FP)* The acquired properties shown in the photographs include acquisitions of co-ownership interest, etc. and additional acquisitions, and the namesof the buildings shown in the photographs are abbreviated from “Shinagawa Seaside TS Tower” to “Shinagawa TS Tower”, “Hotel Intergate
Hiroshima” to “IG Hiroshima” and “Miyazakidai Garden Office” to “Miyazakidai Garden”.

Mid-term target

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SANKEI REAL ESTATE Inc.

Management Highlights (External Growth)– Acquired BELS Evaluation for Two Sub Assets – Acquired Building-Housing Energy-efficiency Labeling System (BELS) evaluation* for two sub assets(December 2021)

B-1

Hotel Intergate Tokyo Kyobashi

27% reduction in energy consumption for this building
Granted on December 17, 2021, certified by third party based on public
notice of the Ministry of Land, Infrastructure, Transport and Tourism

B-2

Hotel Intergate Hiroshima

11% reduction in energy consumption for this building
Granted on December 16, 2021, certified by third party based on public
notice of the Ministry of Land, Infrastructure, Transport and Tourism* “BELS”, the Building-Housing Energy-efficiency Labeling System, is a third-party evaluation system that evaluates the energy-saving performance of buildings based on evaluation
standards set by the Ministry of Land, Infrastructure, Transport and Tourism.

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SANKEI REAL ESTATE Inc.

Earnings Forecasts for 7th Fiscal Period (Ending August 2022) and Thereafter DPU forecast for the 7th FP: 3,120 yen, +4.7% (+141 yen) from the 6th FP
 DPU forecast for the 8th FP: 2,239 yen, -28.2% (-881 yen) from the 7th FP
 Hotels (2 properties) that are sub assets have no risk of reduced revenue due to contracts andsponsorship commitments(yen per unit)

Expensesrelated toleasingbusiness
Rentalrevenue

Cancellation
fees andother
revenue

Other
operatingexpenses

Nonoperating
income(loss)

Rentalrevenue
Cancellation
fees andother
revenue

Expensesrelated toleasingbusiness

Other
operatingexpenses

Nonoperating
income(loss)- Settlement of restoration
work 387- Penalties from previous FP-742- Restoration work expenses -387

5th FP
DPU
Result

6th FP
DPU
Result7th FPDPU
Forecast

8th FPDPU
Forecast
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SANKEI REAL ESTATE Inc.

Earnings Forecasts for 7th Fiscal Period (Ending August 2022) and Thereafter DPU forecast for the 7th FP: 3,120 yen, +4.7% (+141 yen) from the 6th FP
 DPU forecast for the 8th FP: 2,239 yen, -28.2% (-881 yen) from the 7th FP(Unit: million yen)Accounting period
Operating revenue

6th FP Results (A)(February 2022)

7th FP Forecasts (B)(August 2022)

Difference(B)-(A)

8th FP Forecasts (C)(February 2023)

Difference(C)-(B)

2,778

2,996

218

2,772

(223)

2,615

2,515

(100)

2,457

(57)

Parking revenue

34

34

(0)

34

0

- Rent (-100) (Shinagawa (-144), accrual of rent (+40) (Toyo Park (+36), Omori (+5)), other)

Utilities reimbursement- Utilities revenue (-27) (Shinagawa (-26), other)

Rental and CAM revenue

7th FP Forecasts (Comparison with 6th FP)
Operating revenue (+218)

119

92

(27)

91

(0)

Other revenue

7

354

346

188

(165)

Operating expenses

1,237

1,375

138

1,549

173

972

1,056

84

1,245

189

Expenses related to leasing business (+84)

Outsourcing expenses

224

203

(20)

213

10

- Outsourcing expenses (-20) (leasing incentives from previous FP (-17) (Toyo (-14), Hibiya (-3)), other)

Utilities expenses

162

151

(10)

143

(7)

- Utilities expenses (-10) (Shinagawa (-17), BREEZÉ (+3), Toyo Park (+2), Hatchobori (+1), other)

Repair expenses

36

67

31

267

199

Property taxes

220

301

81

301

(0)

Depreciation

306

308

1

295

(13)

Other expenses

22

24

1

24

(0)

1,805

1,939

133

1,526

(412)

Operating revenue (-223)

265

319

53

303

(15)

- Rental revenue (-57) (1) Cancellations (-74) (BREEZÉ (-32), Shinagawa (-29), Omori (-14))

210

265

54

245

(19)

Expenses related to leasing
business [Total]

Operating income (loss) fromleasing
Total other operating
expenses
Asset management fee
Other expenses- Other revenue (+346) (Shinagawa cancellation penalties (+346))- Repair expenses (+31) (BREEZÉ (+10), Shinagawa (+7), Toyo (+4), Miyazakidai (+3), other)- Property taxes (+81) (expensing of fixed assets tax and city planning tax for properties acquired in previous FP(+75), increase of FY22 fixed assets tax and city planning tax (+6))

8th FP Forecasts (Comparison with 7th FP)(2) Accrual of rent (+17) (Miyazakidai (+8), Toyo (+6), Hibiya (+3))- Other revenue (-165) (Shinagawa cancellation penalties from previous FP (-346), proceeds from monetary
settlement of restoration work (+181))

54

53

(0)

58

4

1,540

1,620

80

1,222

(397)

Non-operating income

0

0

(0)

0

0

Non-operating expenses

148

161

13

176

14

Ordinary profit

1,392

1,458

66

1,046

(411)

- Outsourcing expenses (+10) (Shinagawa BM and CM (+4), BREEZÉ BM (+3), other)

Net profit

1,391

1,457

66

1,045

(411)

- Utilities expenses (-7) (Shinagawa (-4), BREEZÉ (-2), other)

2,979 yen

3,120 yen

141 yen2,239 yen(881 yen)

2,112

2,247

135

1,821

(426)

Operating profit

Distribution per unit (Unit: yen)
NOI

Expenses related to leasing business (+189)- Repair expenses (+199) (Shinagawa restoration, etc. (+175), BREEZÉ (+20), other)- Depreciation (-13) (end of depreciation period of facilities, etc. Shinagawa (-7), Omori (-4), other)

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SANKEI REAL ESTATE Inc.

Change in NAV per Unit (after Deduction of Distribution)
 Both external growth and internal growth prove successful; average annual growth rate at +5.1%
Average annual growthrate of +5.1%

123,491(Unit: yen)

121,641

122,507

19,227

20,114

123,268

120,000

114,157
108,184

110,000

21,078

11,744

11,670
Unrealized
gain

100,000

Capitalincreasethroughpublicoffering

Capitalincreasethroughpublicoffering

102,41390,00017,433

102,413

102,413102,393

105,835

96,515～～

Net assets

80,000End of August 2019 End of February 2020 End of August 2020 End of February 2021 End of August 2021 End of February 2022
(1st FP)(2nd FP)(3rd FP)(4th FP)(5th FP)(6th FP)13

SANKEI REAL ESTATE Inc.

MEMO

14

SANKEI REAL ESTATE Inc.

2. External Growth Results and Strategy

15

SANKEI REAL ESTATE Inc.

2-1 External Growth Results
Acquired 4 New Properties in September 2021 (25.1 billion yen)

 Newly acquired 4 office buildings and the asset size following the acquisition expanded to approx. 100 billion yen
 Expanded asset size bearing comparison with economic indicators before and after the property acquisition■ Acquired assets*
Shinagawa Seaside
TS Tower

Property name(25% quasi co-ownershipinterest in sectional
ownership of the building,etc.)■ Change in the portfolio after the 4 properties
were acquired*Hitachi Kyusyu
Building

S-GATE AKASAKA(20% quasi co-ownershipinterest)

Miyazakidai
Garden Office

Before acquisition

Acquired assets

Owned assets at
end of 6th FP(End of February 2022)

Asset size

71.5 billion yen

25.1 billion yen

Number ofproperties

12 properties

4 properties

Acquisition priceper property

5.9 billion yen

6.2 billion yen

6.9 billion yen

Average appraisal
NOI yield

4.3%

4.4%

4.3%

Occupancy rate

98.2%

100%

99.1%

Sponsor support rate(acquisition price basis)100.0%

100.0%

100.0%

Office buildings rate(acquisition price basis)

81.9%

100.0%

86.6%(Acquisition price)

Photo of theproperties

Sponsor support

Sponsor support

Sponsor support

Sponsor support

Office buildings

Office buildings

Office buildings

Office buildings

Location

Shinagawa-ku,
Tokyo

Sawara-ku,
Fukuoka-shi

Minato-ku,
TokyoMiyamae-ku,
Kawasaki-shi

Acquisition price

10,900 million yen

10,000 million yen

1,400 million yen

2,800 million yen

96.6 billion yen

14 properties(including additionallyacquired 2 properties)(acquisition price basis)

Appraisal value atacquisition

11,000 million yen

Appraisal NOI yield

3.9%(acquisition price basis)

10,200 million yen

4.8%

1,422 million yen

3.3%

2,830 million yen

5.0%

Construction
completion

July 2003

Feb. 1996

July 2015

Feb. 1993

Occupancy rate

100.0%

100.0%

100.0%

100.0%(As of July 1, 2021)* The figures for “Acquired assets” show the figures published as of the time of acquisition, and the figures for “Change in the portfolio after the 4 properties were acquired” show the figures as ofthe end of the 5th FP for “Before acquisition,” the figures published as of the time of acquisition of “Acquired assets” and the figures as of February 28, 2022, for “Owned assets at end of 6th FP.”See the notes for details.

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SANKEI REAL ESTATE Inc.

2-2 External Growth Strategy– Implement Diversified Investment Conscious of the Portfolio Matrix –Strong sponsor
supportMakes portfolio’s
profitability and stability
compatible

Diversified investment bymaking maximum use ofstrong sourcing ability

Core investment centeredon developed properties■ Cap. Rate (Appraisal NOI Yield) x Area × Acquisition Price

Area
Actual NOI yield*

Low

0Central 3 wards of Tokyo

1(Chiyoda, Chuo, and Minato wards)

2.5%

Tokyo 23 wards(other than
2 central 3 wards ofTokyo)

Greater Tokyo(Excluding
Tokyo 23
3
wards)

Osaka City
Nagoya4City■ Investment ratio bygeographic area

Tokyo Sankei Building

3.0%

Cap. Rate

3.5%

S-GATE AKASAKA

Typical floorplate 536 tsubos
21 years old
1-minute walk

Typical floorplate
158 tsubos
6 years old
1-minute walk

4.5%

HibiyaS-GATE
SankeiNIHONBASHI- Building
HONCHO
Typical floorplate 105 tsubos

Typical floorplate
186 tsubos
3 years old
4-minute walk29 years old,
1-minute walk

S-GATE AKIHABARA
Typical floorplate 74 tsubos
4 years old
5-minute walk

5.0%

Hatchobori Sankei Building
5.5%

Sub assets

Hiroshima City
4.1%

* Red indicates acquired assets
The size of bubble represents theacquisition price.

Fukuoka
City
10.3%
Osaka
City
Greater
13.6%
Tokyo

Hotel Intergate
Tokyo Kyobashi
4 years old
1-minute walk

4.0%

Office buildings

4.2%

Other ordinancedesignated cities
5
Core cities, major
regional cities

Typical floorplate 201 tsubos
56 years old
3-minute walk

72.0%

Toyo Park Building

Kawasaki City 2.9%

Typical floorplate 219 tsubos
30 years old
9-minute walk

Omori Park Building
Typical floorplate342 tsubos
Shinagawa
28 years old
Seaside TS Tower 3-minute walk
Typical floorplate
Miyazakidai
446 tsubos
Garden Office
18 years old
Typical floorplate
1-minute walk
350 tsubos
29 years old
3-minute walkTokyo 23 wards
69.1%

Hitachi Kyusyu Building
Typical floorplate 322 tsubos
25 years old
17-minute walk

■ Investment Ratio by Asset
Sub assets
13.4%

BREEZÉ TOWER
Typical floorplate
406 tsubos
13 years old
3-minute walkHotel Intergate
Hiroshima
3 years old
3-minute
walk

Office buildings
86.6%

High 6.0%* As some fixed asset taxes on acquired assets have not been expensed, actual NOI yield during normal operation is shown after adjustment
being made assuming these are expensed.

17

SANKEI REAL ESTATE Inc.

2-2 External Growth Strategy– Implement Diversified Investment Conscious of the Portfolio Matrix – Top 3 preference criteria are 1) Transportation convenience, 2) Cost, incl. rent, and 3) Location.
 Aim to build a well-balanced office building portfolio to meet demand for tenants■ Priorities in selection of building for relocation

Satisfaction with SANKEI REAL ESTATE’s properties compared withthe results of the questionnaire survey (for office buildings)

Office tenant questionnaire survey

Transportation
convenience

Cost

Location

Shinagawa Seaside TS Tower

◎

A

○

C

◎

BREEZÉ TOWER

◎

B

◎

C

◎

Hitachi Kyusyu Building

○

A

○

C

◎

S-GATE NIHONBASHIHONCHO

◎

B

◎

I

◎

Hibiya Sankei Building

◎

C

◎

I

○

S-GATE AKASAKA

◎

B

◎

I

◎

Omori Park Building

○

A

○

I/C

○

Hatchobori Sankei Building

◎

A

◎

I

○

Toyo Park Building

○

A

○

I

○

Miyazakidai Garden Office

○

A

○

I

○

Tokyo Sankei Building

◎

C

◎

C

◎

S-GATE AKIHABARA

◎

B

◎

I

◎

75%

Transportation convenience (commuting)73%

Cost (including rent, utilities and administrative expenses)

65%

Transportation convenience (sales activities)

63%

Location (name recognition, concentration of office buildings)

60%

Comfort (air conditioning, illuminance, etc.)

57%

Building’s security

52%

Building’s seismic resistance49%

Building’s BCP compatibility

Transportation
convenience
Cost

Location

42%

Building’s feelings of grade

◎
○

43%

Building’s maintenance system

A
B
C

◎
○

0%

20%

40%

60%

Source: CBRE Research & Reports “Japan Report: Work Beyond COVID Mar 2022

80%

100%

Air
Security
conditioning

Property nameAir conditioning
SecurityIC◎○

No more than a 5-minute walk from a JR or subway station
More than a 5-minute walk and no more than a 10-minute walk from a JR or subway station, or no
more than a 5-minute walk from another private railway station or a bus stop
Rent of no more than 20,000 yen
More than 20,000 yen and no more than 30,000 yen
More than 30,000 yen
In the Miki Shoji Business District
In Tokyo 23 wards, excluding the above areas, Yokohama City and Kawasaki City, Kanagawa Prefecture,
Osaka City and Fukuoka City
Individual air conditioning
Central air conditioning
IC card reader for exclusively owned areas, entrance (equipped with flapper gate facilities or inperson security)
IC card reader for exclusively owned areas, entrance (with employees only entrance/exit)

Source: Prepared by the Asset Manager*Property names are in descending order of acquisition price18

SANKEI REAL ESTATE Inc.

2-2 External Growth Strategy– Implement Diversified Investment Conscious of the Portfolio Matrix –Sponsor Support (1)■ Sponsor development property topics
Office building: Honmachi Sankei Building
An office building for a new era fulfilling the connection
between “heart” and “body”

Logistics facility: SANKEILOGI KashiwanohaFirst in the SANKEILOGI series of logistics facilities
Uses a captive use solar power system
A solar power generation system using thefacility’s roof has been introduced, enabling
captive use of the power generated within
the facility, contributing to a reduction ofenvironmental impact.

Ministry of Land, Infrastructure, Transport and Tourism Sustainable
Building Promotion Program(CO2 reduction type)Obtained highest S Rank of CASBEE-SWO (Smart Wellness Office)Hotel: Hotel Intergate Osaka Umeda
Received the “2021 Osaka Environmentally Friendly ArchitectureAward” for Commercial Facilities and Other Divisions

Obtained highest S Rank of CASBEE-Osaka Mirai (Osaka Building
Environmental Performance Labeling System)
Obtained highest evaluation of 5 stars (ZEB Oriented) in the BuildingHousing Energy-efficiency Labeling System (BELS)
LoungeLocal Value
Gallery* The properties shown on this page are not properties owned or planned to be acquired by SANKEI REAL ESTATE as of the date of preparation of this material,
and there is no assurance that SANKEI REAL ESTATE will decide to acquire or be able to acquire these in future.

19

SANKEI REAL ESTATE Inc.

2-2 External Growth Strategy– Implement Diversified Investment Conscious of the Portfolio Matrix –Sponsor Support (2) *Major properties (excerpt)■ Office building (main asset) development properties
Office buildings
Honmachi Sankei Building

Hareza Tower

Overview
Location

Overview

Honmachi, Chuo-ku, Osaka-shi,
Osaka

Location

Higashi-Ikebukuro, Toshima-ku, Tokyo

Aug. 2021

Construction
completion

May 2020

Total floor area

29,677 m²

Total floor area Approx. 68,600 m²

Number of floors

21 floors above groundNumber offloorsConstruction
completion

Construction
completed in
February 2022

S-GATE Series

33 floors above ground and 2 floors
below ground

S-GATE OTEMACHI-KITA

S-GATE FIT Hatchobori■ Sub asset development properties
Hotels

Logistics facilities

Residential

Developing small medium logistics facilities with high functionality, multiple tenants and little competition• Lease agreement with the sponsor group in• LEFOND PROGRES and others planned tohotel properties owned by SANKEI REAL ESTATE be developed

SANKEILOGI Kashiwanoha

Area
Osaka Area

Property name
Minoh Morimachi Logistics Facility
Project*2

Completion
June 2021

GreaterTokyo

SANKEILOGI Kashiwanoha

March 2022

Osaka Area

Settsu Logistics Project(tentative name)*2

GreaterTokyo

SANKEILOGI Atsugi

September 2022
(planned)
September 2022
(planned)*1*2

April 1, 2022
Launched official Instagram
account
Sankei Building “LEFOND”
Official Instagram account(@lefond.official)

Rendering of SANKEILOGI Atsugi

Rendering of Settsu Logistics Project(tentative name)

Hotel Intergate Osaka Umeda

Hotel Intergate Kanazawa

The properties shown on this page are not properties owned or planned to be acquired by SANKEI REAL ESTATE as of the date of preparation of this material, and there is no assurance that SANKEI REAL ESTATE will decide to acquireor be able to acquire these in future.
The incomplete buildings in the figure above are renderings prepared based on the assumption of the buildings being completed and may differ from the actual buildings.
Joint project.

20

SANKEI REAL ESTATE Inc.

3. Internal Growth Results and Strategy

21

SANKEI REAL ESTATE Inc.

3-1 Internal Growth Results– Rent Revision Performance of Office Buildings (Based on Financial Results) – Even during the COVID-19 pandemic, high occupancy was maintained, and the average rent decreased due tothe diversification by geographic area of the 4 newly acquired properties■ Change in Occupancy Rate
100.0%

100.0%

100.0%

99.9%

End of August 2019

End of February 2020

End of August 2020

End of February 2021

98.2%

99.1%

End of August 2021

End of February 2022

100.0%
95.0%
90.0%
0

～
～
After the COVID-19 pandemic (March 2020)

Cases of Other J-REITs

Investment Corporation A: 97.3 %Investment Corporation C: 96.5 %Investment Corporation B: 96.5 %As at the end of February 2022 from each investment corporation’s website■ Change in Portfolio’s Actual NOI Yield and Office Buildings Average Rent
Actual NOI yield (left axis)
Bar graph: Office Buildings Average Rent (right axis)

4.5%

4.0%

4.3%

4.0%

4.0%

4.4%

4.5%

19,309 yen

19,965 yen

21,000

4.2%

20,00019,00018,486 yen

17,992 yen

3.5%

(yen)

18,00017,523 yen

17,022 yen

3.0%
2.5%

17,00016,000

New acquisitionof 4 properties
September 2021

2.0%

～

1.5%
0 ～

FP endedAugust 2019

FP endedFebruary 2020

FP endedAugust 2020

FP endedFebruary 2021

FP endedAugust 2021

15,000FP endedFebruary 2022～
～14,0000

After the COVID-19 pandemic (March 2020)

Cases of Other J-REITs

Investment Corporation A: 22,885 yen
Investment Corporation C: 19,416 yen

Investment Corporation B: 20,810 yen

22

SANKEI REAL ESTATE Inc.

3-1 Internal Growth Results– Rent Revision Performance of Office Buildings (Based on Contracts Signed) –

Pursued room for internal growth despite the COVID 19 pandemic, and the percentage of increases
grew again■ Rent Revision Performance of Office Buildings (Based on Rental Area)
Percentages of rent revision results (bar graph)
100%

Rate of rent increase (line graph)
30%

27.1%
25.8%
Increase

18.5%

75%

68.5%

74.9%

Increase

Increase

50%

12.7%

10.2%

98.3%
Increase

25%

31.4%

25.1%
No change0%

FP endedAugust 2019
Number oftargeted tenants
Targeted leased
area

9
369

35.1%

65.8%

25%

Increase

Increase
Rate ofincrease

20%

7.0%

73.0%

57.3%

No change

No change

5.2%

1.7%

No change

1.2%

0%
No change
0.1% Decrease

7.6%
Decrease

Decrease

10%
5%

34.1%

No change
0.1%
Decrease

15%

FP endedFebruary 2020

FP endedAugust 2020

FP endedFebruary 2021

FP endedAugust 2021

FP ended
2022年2月期
February 2022

24
3,144

30
4,165

27
2,769

13
1,195

11
1,725

-5%
-10%

After the COVID-19 pandemic (March 2020)■ Rent Revision Performance of Office Buildings (Based on Number of Cases)
By Contract Form
Overall
Decrease
1 caseNo change
8 cases

9.1%

Increase
2 cases18.2%

Fixed-term
Decrease
1 case 12.5%

Ordinary

Increase
2 cases
25.0%

11
cases

8
cases

72.7%

No change 62.5%
5 cases

OfficeRetail

10
cases

1
case

70.0%

100% No change
1 caseDecrease
1 case 10.0%

3cases
100% No change
3 cases

By UseNo change
7 cases

Increase
2 cases
20.0%

23

SANKEI REAL ESTATE Inc.

3-1 Internal Growth Results– Seek Room for Internal Growth and Reduce Risk of Internal Degeneration –Reduction of risk of internal degeneration

Pursuit of room for internal growth
A-2

BREEZÉ TOWER
Although some floors werereturned at the time of therenewal of the fixed-termlease, increased by +5.2%
compared with before

A-5

Although there are tenants whocomplete fixed-term leases,
lease-up without any downtime
Maintaining full occupancy

Reduction of risk of internal degeneration

Reduction of risk of internal degeneration
A-7

Toyo Park Building

Hibiya Sankei Building

A-9

Omori Park Building

Three tenants signed during period
All fixed-term lease contracts

Completed lease-up
of one vacant portion<Occupancy rate>
Improved from 42.6% → 92.3%

Occupancy rate
95.5% → Full occupancy (from April)24

SANKEI REAL ESTATE Inc.

3-2 Internal Growth Strategy– Continue to Aim for Internal Growth Even as Rent Gap Narrows –■Scheduled Renewal with Rent Revision/Renewal and Progress(targeting office buildings)■ Assumed occupancy rate of portfolio

Based on contracts signed (for lease agreements concluded between September 1, 2021, and February 28, 2022)
2022年8月期
EndingAugust2022（第7期）(7th FP)

7th Fiscal Period (ending August 2022)
・End of period 94.3%
・Period average 95.0%

551 tsubos（2.1%）

EndingFebruary
2023年2月期
2023
（第8期）
(8th
FP)
0 0tsubos
tubos

Progress rate 8.5%

2,822 tsubos（10.9%）
500
500tsubos
tubos

1,000
1,500 tubos
tsubos 2,000
2,000tubos
tsubos 2,500
2,500tubos
tsubos 3,000
3,000
tsubos1,000tsubos
tubos 1,500
tubos
25
Contract Revision/Renewal※更改・更新済無Area * No renewals with rent revision/renewal
契約更改・更新済面積
Contract Revision/Renewal Planned Area (Ratio to Total Leased Area)
契約更改・更新予定面積（総賃貸面積に占める割合）

8th FP (ending February 2023)
・End of period 92.9%
・Period average 93.3%■ Change in Rent Gap for Office Buildings
0%

September
2019

March
2020

September
2020

March
2021

-5%
-10%

September
2021

March
2022

-4.4%

-2.9%

-8.5%
-12.0%-15%-14.4%-15.9%-20%
After the COVID 19 pandemic (March 2020)

25

SANKEI REAL ESTATE Inc.

3-2 Internal Growth Strategy– Handling of Emerging Risks of Internal Degeneration (Focused Properties) –A-8

Shinagawa Seaside TS Tower (signed termination by consent with tenant on March 31, 2022)■ Cancellation date
See here for VR view
- March 31, 2022 (7 floors)▶ Received cancellation penalty▶ Settlement of restoration work scheduled- March 31, 2023 (14 floors)■ Status of leasing activities
 Implemented
viewings and questionnaire surveys for attracting tenants andanalysis of sales points
 The impression of the appearance, entrance hall, leased units
and view is highly regarded There is strong demand for continued use of the cafeteria andflapper gate tenant assets
Open entrance hallCafeteria

Flapper gates

View■ Sales Points
Consideration for office workers
Rent advantage
High security

 Located in the “Shinagawa Seaside Forest” large-scale redevelopment district
directly connected to the nearest station. Large commercial facilities are also
located in the vicinity
 Can attract tenants with lower rents than other areas while having high specs inlarge spaces
 24-hour manned management. Although they are tenant assets, flapper gatescan continue to be used

■ Anticipated Targets (Industries) IT, telecommunications, manufacturers, call centers, financial and insurance back offices, companies with test kitchenneeds, etc.

■ Typical Floor Plan (Approx. 446 tsubos)
Pillarless office space- Column-free square space, high ceiling of 2,700 mm- Free access floor- 300 kg/m2 floor load (500 kg/m3 in some areas)■ Shinagawa Seaside Forest Block Map

 Asking Rent in the Kita Shinagawa/
Higashi Shinagawa Area
175

Kita-Shinagawa / Higashi-Shinagawa area
Central 5 wards of Tokyo
Tokyo 23 wards

150
125
100
75

* Indexation of average asking rent in January 2020as the base value of 100
19/1 19/5 19/9 20/1 20/5 20/9 21/1 21/5 21/9 22/1
Source: Prepared by the Asset Management Company based on“Market Data over Time by Area” Sanko Estate Co., Ltd.

26

SANKEI REAL ESTATE Inc.

3-2 Internal Growth Strategy– Transform Imminent Danger into an Opportunity for Future Growth –Current View and Outlook for the Office Rental
Market Although vacancy rates remain high in small andmedium buildings, the rise seems to have halted
overall Although there continues to be an increase inconsolidations and relocations not involving floor
space expansion, some examples providing a sense ofa return of demand have been seen in large spaces
 With the exception of certain industries, corporate
performance is solid or recovering, but there is astrong need to reduce fixed expenses in companies
with decreased ability to pay rents due to thedeterioration of macroeconomic conditions and theeconomy, and the prolonged impact of the COVID-19
pandemic
 Market rents will decline until there is a full recovery
of supply and demand Although telework has become established to acertain degree, companies have deep-rooted officecentric needs due to concerns about efficiency ofoperations, productivity and lack of communication
 COVID-19 has resulted in progress in work-stylereform, leading to diversification of office location
demand and work styles, as well as heightened
preference for highly functional buildings with goodaccessPortfolio of SANKEI REAL ESTATE<Pros>
 Office buildings in prime locations*1
 High-performance office buildings*2
 Office buildings near work and home*3<Cons>
 Issues with tenant distribution

Well-balanced ownership

Emerging risk of internal degeneration: Shinagawa Seaside TS Tower

See this as an opportunity for future growth and implement the main measures below
 Promotion of multiple tenants (improvement of tenant diversification)
 ESG-related investment (health, environmental performance, lease-up cases with all
furnishings, waste reduction, etc.)

Strengthening of portfolio (revenue stability)

Strategic leasing
The prolonged COVID-19 pandemic has given
tenants time to think about the future, and theirdecisions have had a mixture of favorable andadverse effects on the office rent market,
creating a sense of uncertainty

 Pursuit of room for internal growth
Negotiate rent increase with tenants with a rent gap (especially tenants under fixed term lease) Reduction of risk of internal degeneration
Distribute contract periods in view of property characteristics and tenant needs, advance cancellation noticeand switch the form of contract (from ordinary lease → fixed term lease) and diversify tenants*1 Tokyo Sankei Building, BREEZÉ TOWER, Hibiya Sankei Building, S-GATE AKASAKA, S-GATE NIHONBASHI-HONCHO, and Hatchobori Sankei Building are the applicable properties.
*2 Tokyo Sankei Building, BREEZÉ TOWER, Shinagawa Seaside TS Tower, and the S GATE Series (AKASAKA, NIHONBASI-HONCHO, and AKIHA BARA) and Hitachi Kyusyu Building are the applicable properties.
*3 Shinagawa Seaside TS Tower, Toyo Park Building, Omori Park Building, Hitachi Kyusyu Building, and Miyazakidai Garden Office are the applicable properties.

27

SANKEI REAL ESTATE Inc.

4. Financial Strategy

28

SANKEI REAL ESTATE Inc.

Financial Strategy – Financial Highlights (1) – Aim to maintain and improve stable financial formation through the extension of average remaining
time to maturity and enhancement of bank formation
 Financing Highlights (as of March 14, 2022)

 Lender Composition (as of March 14, 2022)

Balance of interestbearing liabilities

50.6 billion yen

LTV

47.5%

Ratio of long-term
debt

80.2%

Ratio of fixedinterest rate

87.5%

0. 39%

Average remaining
time to maturity

2.9 years

Average financing
interest rate

Enhance the bank formation through funding from new financial
institutions from 6th FP[Unit: million yen]
BorrowingamountPercentage

Mizuho Bank

12,76025.2%

Sumitomo Mitsui Banking

9,240

18.3%

Development Bank of Japan

7,700

15.2%

Mizuho Trust & Banking

4,640

9.2%

0.8

Sumitomo Mitsui Trust Bank

4,500

8.9%

0.7

Shinsei Bank

4,080

8.1%

Resona Bank

3,780

7.5%

Aozora Bank

2,000

4.0%

The Nishi-Nippon City Bank

1,000

2.0%

Kansai Mirai Bank

600

1.2%

Chiba Bank

300

0.6%

50,600100.0% Distribution map of average financing interest rates and averageremaining time to maturity of office J-REITs
1.0
0.9
Average financing
interest rate

0.6
0.5
0.4

SANKEI REALESTATE（%） 0.3

0.2
1

2

3

4

5

6

7

Average remaining time to maturity (year)

 LTV Ratio During Normal Operations
End of 6th FP
LTV

47.5%

11 banks in total

End of 7thFP
47.2%

End of 8th FP
47.4%(Forecast)(Forecast)

29

SANKEI REAL ESTATE Inc.

Financial Strategy – Financial Highlights (2) – Incorporated into FTSE EPRA/NAREIT Global Index (December 2021)
 Commencement of analyst coverage (Daiwa Securities) (December 2021)
 Started response to AIFMD Article 8（SFDR）(ongoing since December 2021)
 Promoted the “distribution” and “prolongation” of the maturity ladder Maturity Ladder for Interest-Bearing Liabilities (as of March 14, 2022)


Refinanced borrowing due in the 7th FP (March 14, 2022)



Borrowings to acquire 4 new properties (September 2, 2021)
13.4 billion yen
in total

5.6 billion yen at fixed interest, 6.0 years(to be repaid in 19th FP)

6.2 billion yen at fixed interest, 5.0 years (to be repaid in 16th FP)
6.2 billion yen at fixed interest, 4.0 years (to be repaid in 14th FP)
400 million yen at variable interest, 1.0 year (to be repaid in 7th FP)

 Refinancing results for the 6th FP
At fixed interest, 4.5 years (to be
repaid in 15th FP)(Unit: million yen)

7,000
6,000
5,000
4,000
5,600

3,000
2,000

5,900

4,300

6,200

5,900
4,300

3,700

4,800

6,200

5,600

4,300

3,300

1,000
400

0
6 th FP

7 th FP

8 th FP

9 th FP

10 th FP

11 th FP

Short-term borrowing

12 th FP

13 th FP

14 th FP

15 th FP

16 th FP

17 th FP

18 th FP

19 th FPLong-term borrowing
30

SANKEI REAL ESTATE Inc.

5. ESG Initiatives

31

SANKEI REAL ESTATE Inc.

ESG Initiatives (1)■ Topics
 Acquired “3-Star” and “Green Star” certifications in GRESB ratings (October 2021)
 Established Sustainability Promotion Office (December 2021)
 Acquired BELS evaluation for two sub assets (December 2021)
GRESB Real Estate Assessment:
A global investment benchmark established as a tool to measure the environmental, social, and governance (ESG) considerations of individualcompanies and funds in the real estate sector and used to select investment targets and engage in dialogue with investment targets.

■ Future Initiatives
 Disclosure of ESG benchmarks (improvement of disclosure) Plans to support the TCFD (Task Force on Climate-Related Financial Disclosures)
recommendations■ Various rules associated with ESG
Sustainability Policy(1)

Preserving the earth environment and reducing theenvironmental load of assets under management(4)

Working with executives and employees(2)Serving the local community(5)

Observing compliance and establishing/maintaining aninternal control system(3)

Cooperating with external stakeholders(6)

Disclosing ESG information and securing transparency

Internal regulations, policies, etc.

Sustainability Promotion System•

Chief Sustainability Officer: Executive Deputy President•

Sustainability promotion system rules•

Policy on saving water•

Sustainability Officer: General Manager, Sustainability Promotion Office•

Policy on energy conservation•

Policy on sustainable procurement•

Sustainability promotion meetings: Examining and planning various policies,
targets, and measures related to sustainability•

Policy on greenhouse gas emissions
reduction•

EMS operational manual32

SANKEI REAL ESTATE Inc.

ESG Initiatives (2)■ Environment
Energy consumption reduction targets
 Long-term target 1: Reduce annual energy consumption intensity within the scope managed by the owner by 5% from the base year by 2025
 Long-term target 2: Reduce annual energy consumption intensity within the scope managed by tenants by 1% from the base year by 2025
GHG emission reduction targets<Scope 1 + Scope 2>
 The single-year target is to reduce energy consumption intensity by 1% compared with the previous year for Scope 1 + Scope 2
 Reduce by 5% from the base year in the medium to long term (5 years)<Scope 3>
 Reduce by 1% from the base year in the medium to long term (5 years)
Acquired DBJ Green Building certification for 5 of 12 office buildings
S-GATE AKASAKA(60% quasi co-ownership interest)

S-GATE AKIHABARA

Tokyo Sankei Building(2% co-ownership interest)

S-GATE NIHONBASHI-HONCHO(51% co-ownership interest)

BREEZÉ TOWER(45% quasi co-ownership interest in sectional
ownership of the office portion of the building, etc.)

Acquired “BELS” evaluation for two sub assets
Hotel Intergate Tokyo Kyobashi

Hotel Intergate Hiroshima

Major environmental initiatives[Tokyo Sankei Building]• Installation of energy-saving and long-life
LED lighting• Installation of electric vehicle (EV) chargers• Installation of community cycle ports[BREEZÉ TOWER]• Reduction of building heat load
• Effective use of natural energy• Effective use of water resources andconsideration for surrounding
environment[S-GATE Series]• Realized rooftop greening and•established a terrace
Use greenery at the entrance for an
open and bright approach

33

SANKEI REAL ESTATE Inc.

ESG Initiatives (3)■ Social■ Governance (Internal Control)
Response to the COVID-19
Pandemic

Relationship with Stakeholders[Measures for employees and visitors]•••

Develop a comfortable office environment
Human resources development: Implement
various training
Work-style support: Childcare and nursing
care support[Measures for tenants]••

Implement disaster prevention drills, anddistribute disaster prevention goods
Conduct tenant satisfaction surveys[Connection with the community]•[Prevention]••••

Introduce remote work and staggered commuting
Prepare alcohol disinfectants at common areas
Health management of property management staff
Display posters for preventing the spread of infection[When someone is infected with COVID-19]••

Identify the behavioral history of infected persons
and persons who had close contact with them
Implement disinfection work at the office andcommon areas

Installation of artworks

 Initiative Example 1 (implemented in December 2021)
Agri Marché in Otemachi
Event utilizing the media content functions of Fuji Media Holdings• Held a marché with products from producers in 20 prefectures nationwide• Event for employees and neighboring office workers

Sponsor Commitment: Promotion of Same-Boat Investment By Sponsor•

Sponsor acquires Sankei Real Estate’s investment units sequentially•This helps enhance same boat investment between the sponsor and the unitholders of SANKEI REALESTATE further and strong sponsor support is expected, which contributes to the medium to longterm growth of SANKEI REAL ESTATEEnd of 2nd FP End of 3rd FP

End of 4th FP

End of 5th FP

End of 6th FP

Number of investment
units issued andoutstanding

356,800 units 356,800 units 356,800 units 356,800 units 467,099 units

Number of units held bysponsor

11,362 units

14,979 units

17,479 units

17,479 units

17,479 units

Percentage of units heldby sponsor

3.18%

4.19%

4.89%

4.89%

3.74%

■ Contributions to SDGs (Sustainable Development Goals)
SANKEI REAL ESTATE’s efforts have contributed to the following SDGs.

Implementation: Tokyo Sankei Building Initiative Example 2(from November 2021)

Xmas Illumination
Implementation: Tokyo Sankei Building

Goal 3: Ensuring prevention of the spread of infectious
diseases, flexible work styles
Goal 7: LEDs, solar power, reduction of heat load
Goal 8: Rooftop terraces (worker-friendly buildings)
Goal 11: Green Building certification, seismic dampers, stockpiles
Goal 12: Appropriate treatment and recycling of industrial waste
Goal 13: Disaster countermeasures, intake of people having
difficulty returning home
34

SANKEI REAL ESTATE Inc.

Appendix

35

SANKEI REAL ESTATE Inc.

Balance Sheet (Unabridged) for the Fiscal Period Ended February 2022 (6th FP)(Unit: thousand yen)
5th FP
6th FP(as of Aug. 31, 2021) (as of Feb. 28, 2022)

5th FP
6th FP(as of Aug. 31, 2021) (as of Feb. 28, 2022)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Land
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust , net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
SoftwareTotal intangible assets
Investments and other assets
Long-term prepaid expenses
Deferred tax assets
Leasehold and guarantee deposits
Total investments and other assets
Total non-current assets
Deferred assets
Investment unit issuance expenses
Total deferred assets
Total assets

4,457,965
2,799,257
36,07959,212
77
7,352,593

4,512,675
3,729,623
89,93861,458389,37708,783,072

169,301(15,201)
154,100
544
(25)
518
2,457,766
14,340,970(992,106)
13,348,864
23,832(1,435)22,396
11,302(564)
10,73728,239(5,727)22,51256,132,575
281,344
72,430,815

179,269(18,849)
160,419
544
(39)
504
2,457,766
18,708,509(1,291,738)
17,416,771
71,171(2,476)
68,695
11,302(1,131)
10,17029,876(7,822)
22,05477,433,848
32,673
97,602,903

4,833
4,833

3,893
3,893

43,72413
10,00053,73872,489,387

93,33810
10,000103,348
97,710,146

6,488
6,488
79,848,468

30,12430,124
106,523,343

Liabilities
Current liabilities
Operating accounts payable
Short-term borrowings
Long-term borrowings due within 1 year
Accounts payable – otherAccrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Long-term borrowings
Leasehold and guarantee deposits received
Leasehold and guarantee deposits received in trust
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Unitholders’ capital deduction
Unitholders’ capital (net)
Surplus
Unappropriated retained earnings (undisposed loss)

Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets

225,346
9,900,000
494,644
27,936875
89,208339,943
14,065
11,092,019

126,748
400,000
11,500,000
242,634
38,805815
485,392
11,356
12,805,752

27,900,000
82,1393,219,176
31,201,315
42,293,334

38,700,000
87,974
4,102,499
42,890,473
55,696,225

36,540,901
36,540,901

49,442,685(7,136)49,435,549

1,014,232
1,014,232
37,555,134
37,555,134
79,848,468

1,391,567
1,391,567
50,827,117
50,827,117
106,523,343

36

SANKEI REAL ESTATE Inc.

Statement of Income (Unabridged) for the Fiscal Period Ended February 2022 (6th FP)(Unit: thousand yen)
5th FP

6th FP(ended Aug. 2021)(ended Feb. 2022)

Operating revenue
Leasing business revenue
Other leasing business revenue

2,032,902

2,615,817

143,210

162,297

2,176,113

2,778,114

Expenses related to leasing business

793,758

972,543

Asset management fee

195,532

210,809

Asset custody fee

1,575

2,013

Administrative service fees

7,100

8,760

Remuneration for directors (and other officers)

3,600

3,600

Other operating expenses

33,20340,098

Total operating expenses

1,034,769

1,237,824

1,141,343

1,540,290

Total operating revenue
Operating expenses

Operating profit
Non-operating income
Interest income

31

37

Insurance claim income

994

253

Interest on refund

50

0Other non-operating income

15

17

Total non-operating income

1,091

308

Interest expenses

66,412

88,264

Borrowing related expenses

61,12048,540Investment unit issuance expenses

-

6,024

Other non-operating expenses

-

5,583

Total non-operating expenses

127,533

148,414

Ordinary profit

1,014,902

1,392,184

Net profit before income taxes

Non-operating expenses

1,014,902

1,392,184

Income taxes - current

880

820

Income taxes - deferred

0

2

880

823

1,014,021

1,391,360

Total income taxes
Net profit
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

210

207

1,014,232

1,391,567

37

SANKEI REAL ESTATE Inc.

Statement of Cash Flows for the Fiscal Period Ended February 2022 (6th FP)
5th FP(FP ended Aug. 2021)

Cash flows from operating activities
Net profit before income taxes
Depreciation
Investment unit issuance expenses
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable - other
Increase (decrease) in consumption taxes payable
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease (increase) in long-term prepaid expenses
Decrease (increase) in other assets
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Proceeds from leasehold and guarantee deposits received
Refund of leasehold and guarantee deposits received
Proceeds from leasehold and guarantee deposits received in trust
Refund of leasehold and guarantee deposits received in trust
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Proceeds from issuance of investment units
Payments of investment unit issuance expenses
Distribution paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period(Unit: thousand yen)
6th FP(FP ended Feb. 2022)

1,014,902
229,481(31)
66,412
20,672
9,321(12,615)
18,847
12,407
89,208(33,871)
6,568
(487)
40,937
1,461,754
31(64,651)(884)
1,396,250

1,392,184
307,9376,024(37)88,264(47,934)(389,377)(2,245)(86,226)
9,619(89,208)
145,449(2,709)(49,613)77
1,282,20437(77,396)(881)
1,203,964(3,460)(28,670)
2,572
(19)
3,970
(35,084)(60,691)(9,967)(25,743,595)
5,933
(98)
1,005,708(128,308)(24,870,328)

4,800,000(4,800,000)(6,488)(1,015,975)(1,022,464)
313,095
6,944,127
7,257,223

1,000,000(600,000)
16,700,000(4,300,000)
12,901,784(29,661)(1,020,683)
24,651,439
985,075
7,257,223
8,242,298

38

SANKEI REAL ESTATE Inc.

Mizuho Bank
Sumitomo Mitsui Banking
Corporation
SubtotalMizuho Bank
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan Inc.
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
Mizuho Bank
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan Inc.
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
Mizuho Bank
Sumitomo Mitsui Banking
Corporation
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
Mizuho Bank
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan Inc.
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
Mizuho Bank
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan Inc.
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
Mizuho Bank
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan Inc.
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank

Borrowing amount(million yen)
260
140Interest rate
0.23545%400(floating)Borrowing date
Repayment(upper row)method Description
Maturity date(lower row)
Sep. 2, 2021
Lump-sum Unsecured
repayment
NonAug. 31, 2022
at maturity guaranteed

Term

400
972
716
614
392
358
324
324
856

3,700

0.42346%(fixed)Mar. 12, 2019
Mar. 12, 2023

639

548
350
319
294
294
2,250

3,300

0.49096%(fixed)Mar. 12, 2019
Mar. 12, 2024

Long-term borrowings

LenderLong-term borrowings

Term

Short-termborrowings

Status of Lenders (as of March 14, 2022)

1,500
620
550
490
490
950

5,900

0.26727%(floating)Sep. 3, 2019
Sep. 3, 2022

Lump-sum Unsecured
repayment
Nonat maturity guaranteed

800
2,000
620
550
490
490
1,167

5,900

0.36200%(fixed)Sep. 3, 2019
Sep. 3, 2023

832
713
456

4,300

416

0.32923%(fixed)March 12, 2020
September 12,
2024

358
358
1,331
929
796
509
465
385
385

LenderMizuho Bank
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan Inc.
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
The Nishi-Nippon City Bank
Kansai Mirai Bank
Chiba Bank
Mizuho Bank
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan Inc.
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
Aozora Bank
The Nishi-Nippon City Bank
Kansai Mirai Bank
Chiba Bank
Mizuho Bank
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan Inc.
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
Aozora Bank
Mizuho Bank
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan Inc.
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
Subtotal
Total

Interest rate

Borrowing date(upper row)
Maturity date(lower row)

6,200

0.29655%(fixed)Sep. 2, 2021
Sep. 2, 2025

6,200

0.35542%(fixed)Sep. 2, 2021
Sep. 2, 2026

Borrowing amount(million yen)

Repayment
Description
method

1,550
1,000
700
600
500
500
400
500
300
150
750
700
700
200
500
500
400
1,500
500
300
150
1,100

Lump-sum Unsecured
repayment
Nonat maturity guaranteed

900
700
300
300
300
200
500
1,574

4,300

0.38044%(fixed)October 1, 2021
Apr. 1, 2026

5,600

0.77500%(fixed)Mar. 14, 2022
Mar. 14, 2028

1,084
929
593
542
439
439
50,20050,600* If the maturity date is not a business day, it will be the following business day.
4,800

0.36978%(fixed)March 12, 2021
March 12, 2025

39

SANKEI REAL ESTATE Inc.

Key Performance Indicators (KPIs) for the Fiscal Period Ended February 2022 (6th FP)
5th FP

6th FP

5th FP

6th FP(ended Aug. 2021)(ended Feb. 2022)(ended Aug. 2021)(ended Feb. 2022)(against total assets)

47.3%

47.5%

Distribution per unit

(against total assets<considering unrealized
gain/loss>)

43.4%

44.1%

(against book value)

4.5%(against appraisal value)

2,862 yen

2,979 yen

Distribution yield

4.4%

5.5%

4.3%

ROE

5.4%

5.5%

4.1%

4.0%

Net assets per unit

105,255 yen

108,814 yen(against book value)

3.8%

3.7%

NAV per unit

125,369 yen

126,247 yen(against appraisal value)

3.5%

3.4%

Investment unit price (at end of period)

129,600 yen

108,200 yen(NOI yield)

4.0%

4.4%

NAV multiple

1.0x

0.9x

(NOI yield after
depreciation)

3.5%

3.7%

PBR

1.2x

1.0x

FFO

1,242 million yen 1,698 million yen

PER

22.8x

18.2x

AFFO

1,185 million yen 1,624 million yen

FFO multiple

18.6x

14.9x

(FFO)

82.2%

81.9%

(AFFO)

86.1%

85.7%

LTV

NOI yield

NOI yield after depreciation

Implied cap rate

FFO per unit

3,482 yen

3,635 yen
Payout ratio

EPS

2,841 yen

2,978 yen

*1. LTV (against total assets) = Interest-bearing liabilities / Total assets (book value)
LTV (against total assets <considering unrealized gain/loss>) = Interest-bearing liabilities / (Total assets(book value) + unrealized gain/loss)*2. NOI yield (against book value) = (Operating income from real estate leasing + Depreciation) /Book valueof real estate for lease
NOI yield (against appraisal value) = (Operating income from real estate leasing + Depreciation) /Appraisal value of real estate for lease*3. NOI yield after depreciation (against book value) = Operating income from real estate leasing / Book
value of real estate for lease
NOI yield after depreciation (against appraisal value) = Operating income from real estate leasing /Appraisal value of real estate for lease*4. Implied cap rate (NOI yield) = NOI (Annualized result of current FP x 2) / (Total fair value +Interestbearing liabilities – Cash and deposits + Leasehold deposits received)
Implied cap rate (NOI yield after depreciation) = NOI after depreciation (Annualized result of current FPx2) / (Total fair value + Interest-bearing liabilities – Cash and deposits + Leasehold deposits received)*5. FFO = Net profit + Depreciation – Gain/loss on sales of real estate properties (including loss onretirement of non-current assets)*6. AFFO = FFO – Capital expenditure*7. FFO per unit = FFO / Total number of investment units issued and outstanding at end of period*8. EPS = Net profit / Total number of investment units issued and outstanding at end of period*9. Di stributio nper u nit = Tota l di stributio n/ Tota l number of i nve stme nt u nit si ssued a ndoutstanding at end of period*10. Di stributio nyie ld = Di stributio nper u nit (Annu a lized re su lt of curre nt FP x2) / I nve st me nt
unit price (at end of period)*11. ROE (Return on equity) = Net profit (Annualized most recent result x 2) / Net assets*12. NA V per u nit = ( Ne t a sset s + U nrea lized gai n/ lo ss) / Tota l number of i nve stme nt u nit s
issued and outstanding at end of period*13. NAV multiple = Investment unit price (at end of period) / NAV per unit
*14. PBR (Price Boo k-va lue Ratio) = I nve stme nt u nit price (at e nd of period) / Ne t a ssets perunit*15. PER (Price Ear ni ng s Ratio) = I nve stme nt uni t price (at e nd of period) / EPS (A nnua lized
most recent result x 2)
*16. FFO multiple = Investment unit price / FFO per unit (Annualized most recent result x 2)
*17. Payout ratio (FFO) = Total distribution / FFO*18. Payout ratio (AFFO) = Total distribution / AFFO
*19. Figure sare rou nded dow nto the i ndicated digit s(Perce ntage sa nd mu lt ip le sare rou nded
to one decimal place.)40

SANKEI REAL ESTATE Inc.

Statement of Income from Leasing by Property for the Fiscal Period Ended February 2022 (6th FP)(Unit: thousand yen)
Property number

A-1

A-2

A-3

A-4

A-5

A-6

A-7

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

BREEZÉ TOWER

S-GATENIHONBASHIHONCHO

S-GATEAKIHABARA

HibiyaSankei Building

Hatchobori
Sankei Building

ToyoPark Building

Property nameTokyo
Sankei Building

Leasing business revenue

54,822551,263

160,701

68,651

199,346

173,792

65,987

Rental revenue

47,787436,705

153,571

65,353

173,697

142,978

51,255

CAM revenue

2,021

87,991--

13,232

13,790

5,937

Utilities reimbursement

3,688

17,672

4,505

2,864

9,479

9,529

6,427

Parking revenue

822

7,888

2,487

384

1,797

6,026

2,300

Other rental revenue

502

1,006

137

49

1,140

1,467

67

Expenses related toleasing business

31,012

214,232

44,04822,703

95,54159,30348,286

Outsourcing expenses

6,050

65,138

9,050

5,386

18,87016,641

22,182

Utilities expenses

3,327

37,726

5,527

3,191

9,272

12,103

5,790

Property taxes

12,26537,257

10,231

4,762

53,677

9,694

7,603

683

1,135

-

-

-

-

-

Repair expenses

3,051

5,611

295

940

6,342

3,293

3,358

Insurance premium

95

807

319

146

283

429

224

-

247

250

250

250

250

350

3,661

64,10018,036

7,623

6,481

16,323

8,475

1,878

2,207

337

401

363

568

301

23,809337,030

116,653

45,948103,804

114,488

17,701

27,471

401,130

134,690

53,571

110,286

130,812

26,176

Land rent

Trust fee
Depreciation
Other expenses fromleasing
Operating income (loss)
from leasing
NOI

41

SANKEI REAL ESTATE Inc.

Statement of Income from Leasing by Property for the Fiscal Period Ended February 2022 (6th FP)(Unit: thousand yen)
Property number

A-8

A-9

A-10

A-11

A-12

B-1

B-2

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Sub assets

Sub assets

Property nameShinagawa Seaside
TS Tower

Omori
Park Building

S-GATE AKASAKA

Miyazakidai Garden
OfficeHitachi Kyusyu
Building

Hotel Intergate
Tokyo Kyobashi

Hotel Intergate
Hiroshima

Total

Leasing business revenue

159,287

76,157

206,955

118,800

2,778,114

Rental revenue

130,728

63,566

206,955

118,800

2,479,240

CAM revenue

10,037

3,567

-

-

136,576

Utilities reimbursement

12,355

6,206

-

-

119,960

Parking revenue

5,374

1,533

-

-

34,789

-

-

7,547

54,371

43,509972,543

Other rental revenue
Expenses related toleasing business

791

(Not
disclosed)*

68,624

1,282(Not
disclosed)

30,408(Not
disclosed)

Outsourcing expenses

14,953

9,152

1,200

1,800

224,074

Utilities expenses

17,502

6,357

-

-

162,294

Property taxes

16,010025,58915,377220,379

-

-

-

-

1,818

Repair expenses

3,152

3,653

-

-

36,069Insurance premium

410

219

520

462

6,044

Trust fee

350

347

250

250

3,871

26,77025,572306,997

41

46

10,992Land rent

Depreciation
Other expenses fromleasing
Operating income (loss)
from leasing
NOI

66,77915,894

10,428350

10,04826,800628

363,855

90,66385,36545,749232,627

152,584

75,2901,805,571

430,635

106,557

95,79455,797259,427

179,354

100,862

2,112,568* The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not beenobtained from the tenant, relevant party, etc. or information from which confidential information can be derived.

42

SANKEI REAL ESTATE Inc.

Overview of Appraisal Value (as of February 28, 2022)(Unit: million yen)
Property
number

Property nameAcquisition
price

End of 6th FP
Book value (a)End of 5th FP

End of 6th FP(August 31, 2021) (b)(February 28, 2022) (c)Appraisal value

CR*1

Appraisal value

Change from appraisal in theprevious fiscal period(c)－(b)CR

Appraisal value

CR

Unrealized
gain/loss(c)－(a)Tokyo Sankei Building(2% co-ownership interest)
BREEZÉ TOWER(45% quasi co-ownership interest in sectional
ownership of the office portion of the building,etc.)
S-GATE NIHONBASHI-HONCHO(51% co-ownership interest)

2,509

2,618

2,690

2.5%

2,690

2.4%

0

-0.1pt71

13,10013,013

17,2803.8%

17,7753.7%

495-0.1pt

4,761

6,698

6,689

7,470

3.3%

7,490

3.3%

20

0.0pt

800

A-4

S-GATE AKIHABARA

2,055

2,044

2,530

3.5%

2,630

3.4%

100

-0.1pt585

A-5

Hibiya Sankei Building

5,829

6,070

6,410

3.0%

6,570

2.9%

160

-0.1pt499

A-6

Hatchobori Sankei Building

4,959

5,019

5,500

4.1%

5,510

4.1%

10

0.0pt

490

A-7

Toyo Park Building

3,782

3,887

3,610

4.0%

3,820

3.8%

210

-0.2pt-67

A-8

Shinagawa Seaside TS Tower(50% quasi co-ownership interest in sectional
ownership of the building, etc.)

20,94021,179(11,000)(3.6%)

21,8503.6%(0.0pt)

670

*2

*2

A-9

Omori Park Building

5,400

5,458

5,490

3.8%

5,490

3.7%

A-10

S-GATE AKASAKA(80% quasi co-ownership interest in sectional
ownership of the building, etc.)

5,600

5,652

(4,266)(3.2%)

5,688

3.2%

*2

*2

Miyazakidai Garden Office

2,800(2,830)(4.8%)

A-1

A-2

A-3

A-11
A-12

Hitachi Kyusyu Building

Office buildings subtotal (total of 12 properties)

10,0002,853*310,20883,67484,695*3(10,200)(4.3%)

*3

*3

-

-

*2

0
-

-0.1pt31(0.0pt)

35

*2

2,790
10,300

4.5%
4.3%

92,603(-40)(-0.3pt)

*3

*3

(100)

(0.0pt)

*3

*3

-

-63
91
7,907

B-1

Hotel Intergate Tokyo Kyobashi

8,961

8,951

9,010

3.8%

9,020

3.8%

10

0.0pt

68

B-2

Hotel Intergate Hiroshima

3,990

3,923

4,070

4.6%

4,090

4.6%

20

0.0pt

166

Sub assets subtotal (total of 2 properties)

12,951

12,875

13,080

Portfolio total (total of 14 properties)

96,62597,570-13,110105,71330-*1 CR is a cap rate based on direct capitalization method (NCF basis).
*2 The figures shown in parentheses are the appraisal values before acquisition of additional quasi co-ownership interest (25% quasi co-ownership interest in sectional ownership of thebuilding, etc. of “A-8” and 60% quasi co-ownership interest of “A-10”).
*3 The figures in parentheses show the appraisal values published at the time of acquisition as reference values, and the “Change from appraisal in the previous fiscal period” is the change
from the appraisal value published at the time of acquisition.

234
8,142

43

SANKEI REAL ESTATE Inc.

Status of Unitholders (as of February 28, 2022)
 Breakdown of Investment Units by Unitholder Type
Financial institutions
Other Japanese corporations
Individuals/Other100%

16.88%

90%
80%
70%

11.66%

15.63%

14.52%

6.75%
1.49%

4.52%
1.22%

5.53%
1.14%

Number ofunits owned(units)Share of units
owned
(%)

The Master Trust Bank of Japan, Ltd. (Trust Account)

87,92418.82%

18.23%

Custody Bank of Japan, Ltd. (Trust Account)

72,236

15.46%

5.94%
2.00%

Custody Bank of Japan, Ltd.
(Security Investment Trust Account)

27,739

5.93%

The Nomura Trust and Banking Co., Ltd.
(Investment Trust Account)

25,723

5.50%

The Sankei Building Co., Ltd.

17,4793.74%

BNP PARIBAS SECURITIES SERVICESLUXEMBOURG/JASDEC/SECURITIES-AIFM

13,039

2.79%

Aozora Bank, Ltd.

11,2562.40%

SCBHK AC LIECHTENSTEINISCHE LANDESBANK AG

6,528

1.39%

The Bank of Yokohama, Ltd.

6,107

1.30%

JAPAN SECURITIES FINANCE CO., LTD.

5,345

1.14%

273,376

58.52%Name of unitholder
13.22%

13.93%

14.31%

14.68%

16.07%

15.62%

14.24%
6.25%
1.24%

5.96%
2.57%

60%
50%
40%
63.19%

30%

64.48%

63.92%

 Major Unitholders

Securities companies
Non-Japanese corporations, etc.

64.31%

62.61%

57.74%

20%
10%0%
End of 1st FP End of 2nd FP End of 3rdt FP End of 4th FP End of 5th FP End of 6th FP

 Number of Unitholders by Unitholder TypeEnd of
1st FP

End of
2nd FP

End of
3rd FP

End of
4th FP

End of
5th FP

End of
6th FP

Financial institutions

37

55

54

49

43

50

Securities companies

17

19

23

22

22

23

116

127

131

135

124

178

57

62

59

70

75

143

Individuals/Other

6,399

7,585

7,458

7,406

7,064

10,117

Total

6,626

7,848

7,725

7,682

7,328

10,511Other Japanese
corporations
Non-Japanese
corporations, etc.

Total
* Each share above is rounded down to two decimal place.

44

SANKEI REAL ESTATE Inc.

Portfolio List (1) (as of February 28, 2022)
Property number

A-1

A-2

A-3

A-4

A-5

A-6

A-7

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Property nameTokyo
Sankei Building

BREEZÉ TOWER

S-GATENIHONBASHI-HONCHO

S-GATEAKIHABARA

HibiyaSankei Building

Hatchobori
Sankei Building

ToyoPark Building(2% co-ownershipinterest)(45% quasi co-ownershipinterest in sectional ownershipof the office portion of thebuilding, etc.)(51% co-ownershipinterest)

Chiyoda-ku, Tokyo

Kita-ku, Osaka-shi

Chuo-ku, Tokyo

Chiyoda-ku, Tokyo

Chiyoda-ku, Tokyo

Chuo-ku, Tokyo

Koto-ku, Tokyo

Acquisition dateMar. 12, 2019(1) Mar. 12, 2019(2) Sep. 3, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Acquisition price

2,509 million yen

13,100 million yen

6,698 million yen

2,055 million yen

5,829 million yen

4,959 million yen

3,782 million yen

Appraisal value

2,690 million yen

17,775 million yen

7,490 million yen

2,630 million yen

6,570 million yen

5,510 million yen

3,820 million yen

Appraisal NOI yield(Appraisal NOI/Acquisition
price)

2.7%

5.5%

3.8%

4.4%

3.6%

5.1%

4.0%

Construction completion

Sep. 2000

Jul. 2008

Oct. 2018

Sep. 2017

Jun. 1992

Sep. 1965

Jun. 1991

Occupancy rate

97.7%

99.8%

100.0%

100.0%

100.0%

100.0%

92.3%

PML value

2.3%

2.8%

2.0%

2.2%

3.1%

0.3%

9.0%

Location45

SANKEI REAL ESTATE Inc.

Portfolio List (2) (as of February 28, 2022)
Property number

A-8

A-9

A-10

A-11

A-12

B-1

B-2

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Sub assets

Sub assets

Property nameShinagawa Seaside
TS Tower

Omori
Park Building

S-GATEAKASAKA

Miyazakidai
Garden OfficeHitachi Kyusyu
Building

Hotel Intergate
Tokyo Kyobashi

Hotel Intergate
Hiroshima(50% quasi co-ownershipinterest in sectional ownershipof the building, etc.)(80% quasi co-ownershipinterest)

Shinagawa-ku, Tokyo

Ota-ku, Tokyo

Minato-ku, Tokyo

Miyamae-ku,
Kawasaki-shi

Sawara-ku,
Fukuoka-shi

Chuo-ku, Tokyo

Naka-ku,
Hiroshima-shi

Acquisition date(1) Sep. 3, 2019(2) Sep. 2, 2021

Sep. 3, 2019(1) Oct. 1, 2020
(2) Sep. 2, 2021

Sep. 2, 2021

Sep. 2, 2021

Mar. 12, 2019

Sep. 3, 2019

Acquisition price

20,940 million yen

5,400 million yen

5,600 million yen

2,800 million yen

10,000 million yen

8,961 million yen

3,990 million yen

Appraisal value

21,850 million yen

5,490 million yen

5,688 million yen

2,790 million yen

10,300 million yen

9,020 million yen

4,090 million yen

Appraisal NOI yield(Appraisal NOI/Acquisition
price)

4.1%

4.0%

3.3%

4.6%

4.8%

3.9%

5.0%

Construction completion

Jul. 2003

May 1993

Jul. 2015

Feb. 1993

Feb. 1996

Jan. 2018

Oct. 2018

Occupancy rate

100.0%

100.0%

100.0%

85.7%

100.0%

100.0%

100.0%PML value

3.2%

5.6%

4.6%

9.5%

2.5%

1.8%

2.1%

Location

PML value (average)

1.5%

46

SANKEI REAL ESTATE Inc.

Portfolio Matrix (1) (as of February 28, 2022)<Cap. Rate (Appraisal NOI Yield) x Area>
Area

Central 3 wards of Tokyo

Area
Tokyo 23 wards

Greater Tokyo(Chiyoda, Chuo, and Minato wards) (Other than the central 3 wards of Tokyo)
Appraisal
NOI
CAP

Less than
3.0%
Less than
3.5%

Property name
Building age, walking
time from station

Property nameAcquisition price

Building age, walking
time from station

Acquisition price(Excluding Tokyo)

Nagoya City

Property name

Property name

Building age, walking
time from station(Unit: million yen)
Total
Other ordinance-designatedacquisition
citiespriceCore cities, major regional(Overall ratio)
citiesOsaka City

Acquisition price

Building age, walking
time from station

Property nameAcquisition price

Building age, walking
time from station

Acquisition
priceTokyo Sankei Building

2,509

21 years old,
1-minute walk

2,509

(2.6%)

5,600(5.8%)S-GATE AKASAKA
6 years old,
1-minute walk

5,600

Hibiya Sankei Building

Cap. Rate

29 years old,
1-minute walkLess than
4.0%

5,829

S-GATE NIHONBASHI-HONCHO
3 years old,
4-minute walk

21,4896,698(22.2%)

Hotel Intergate Tokyo Kyobashi
4 years old,
1-minute walk

8,961

S-GATE AKIHABARA
4 years old,
5-minute walk

2,055

Less than
4.5%

Shinagawa Seaside TS Tower
18 years old,
1-minute walk

20,940Omori Park Building

32,17728 years old,
3-minute walk

(33.3%)

5,400

Toyo Park Building
30 years old,
9-minute walk

3,782

Miyazakidai Garden Office
29 years old,
3-minute walkLess than
5.0%

Hitachi Kyusyu building
25 years old,
17-minute walk

2,800

10,00016,790Hotel Intergate Hiroshima(17.4%)

3 years old,
3-minute walk
5.0%
or moreHatchobori Sankei Building
56 years old,
3-minute walkTotalacquisition
price(Overall ratio)

BREEZÉ TOWER
13 years old,
3-minute walk

4,959

3,990
18,05913,100(18.7%)

36,61330,1222,800

13,10013,99096,625(37.9%)(31.2%)(2.9%)(13.6%)(14.5%)(100.0%)

Typical Floorplate * Office Buildings Only
400 tsubos
or moreLess than 400 tsubos, but
200 tsubos or more

Less than 200 tsubos, but
100 tsubos or more

Less than
100 tsubos

47

SANKEI REAL ESTATE Inc.

Portfolio Matrix (2) (as of February 28, 2022)<Typical floorplate x Area>
Area(Unit: million yen)
Area

Tokyo 23 wards

Central 3 wards of Tokyo

Greater Tokyo(Chiyoda, Chuo, and Minato wards) (Other than the central 3 wards of Tokyo)
Typicalfloorplate(tsubo)Typical floorplate (tsubo)

400 tsubos
or moreLess than
400 tsubos
300 tsubos
or moreLess than
300 tsubos
200 tsubos
or moreProperty name
Building age, walking
time from station

Property nameAcquisition priceTokyo Sankei Building
21 years old,
1-minute walk

2,509

Building age, walking
time from station

Acquisition price18 years old,
1-minute walk

4,959

Property nameAcquisition price

Building age, walking
time from station

Miyazakidai Garden Office

5,400

29 years old,
3-minute walk

Acquisition price

Acquisition
price36,54913,100(37.8%)

Hitachi Kyusyu building
25 years old,
17-minute walk

2,800

Toyo Park Building
30 years old,
9-minute walk

Property name
Building age, walking
time from station

BREEZÉ TOWER
13 years old,
3-minute walk

20,940Omori Park Building

56 years old,
3-minute walk

Nagoya City

Property nameShinagawa Seaside TS Tower

28 years old,
3-minute walk

Hatchobori Sankei Building(Excluding Tokyo)
Building age, walking
time from station

Total
Other ordinance-designatedacquisition
citiespriceCore cities, major regional cities (Overall ratio)

Osaka City

10,000(18.8%)

Hotel Intergate Hiroshima

12,732

3 years old,
3-minute walk

3,782

18,2003,990(13.2%)S-GATE NIHONBASHI-HONCHO
3 years old,
4-minute walk

6,698

Hibiya Sankei Building
Less than
200 tsubos
100 tsubos
or more29 years old,
1-minute walk

5,829

27,089S-GATE AKASAKA
6 years old,
1-minute walk

(28.0%)
5,600

Hotel Intergate Tokyo Kyobashi
4 years old,
1-minute walkLess than
100 tsubos

8,961

S-GATE AKIHABARA
4 years old,
5-minute walkTotalacquisition
price(Overallratio)

2,055

2,055

(2.1%)

42,01324,7222,800

13,10013,99096,625(43.5%)(25.6%)(2.9%)(13.6%)(14.5%)(100.0%)

Typical Floorplate * Office Buildings Only (Construction area is used as reference value for hotels)
400 tsubos
or moreLess than 400 tsubos, but
200 tsubos or more

Less than 200 tsubos, but
100 tsubos or more

Less than
100 tsubos

48

SANKEI REAL ESTATE Inc.

Portfolio Status (as of February 28, 2022)
SANKEI REAL ESTATE’s high-quality portfolio is supported by strong sponsor support

Sponsor support rate 100%
Close
Percentage by Walking Time to the Nearest Station

New

More than
20 years,
but within
30 years
27.5%

Within1minute45.4%

3.9
minutesWithin 3 minutes
Within 5 minutes

86%
40%

Average

60%

80%

100%

400 tsubos
or more320.4
tsubos

200 tsubos or
more,
but less than
300 tsubos

43.7%

10.4%
300 tsubos or more,
but less than 400 tsubos

21.8%

28%

Within 15 years

77%

2.5%

21.7%

18.7
years

Within 10 years

45%

20%

Average

100 tsubos or more,
but less than 200 tsubos

Within
10 years
28.3%

More than
10 years,
but within
15 yearsMore than 15 years, 13.6%
but within 20 years
21.7%

More than 1 minute,but within 3 minutes
31.3%

0%

Less than
100 tsubos

More than
30 years
9.0%

14.3%
More than
3 minutes,
but within
5 minutes
Average
9.1%

Within 1 minute

Percentage by Typical Floorplate (Office Buildings)

Percentage by Building Age

More than 5 minutes

Large

Large-scale buildings*

42%

Within 20 years

63%

Within 30 years

Large buildings

91%
0%

20%

40%

60%

80%

76%
98%

0%

20%

40%

60%

80% 100%

100%* Calculated based on the definition of “Large-scale buildings: 200 tsubos or more” and “Large buildings: 100 tsubos or more, but less than 200 tsubos” made by Sanko Estate Co., Ltd.

49SANKEI REAL ESTATE Inc.

Status of Lease Agreements (as of February 28, 2022; based on leased area after considering ownership interest)
Percentage by Contract Form

Percentage by Lease Period

Percentage by Lease Period(including hotels)(excluding hotels)

10 years or more
4.8%

10 years or more

Less than 3 years

18.9%

Less than 3 years

30.4%
Ordinary building leaseagreement

54.0%

46.0%
Fixed-term building leaseagreement

35.7%

Average*1

Average*1

6.4 years

4.1 years

12.5%

38.2%

3 years or more, butless than 5 years

5 years or more, butless than 10 years(Manufacturing)

Others 3.6%

Precision devices 1.5%
Machinery 1.9%
Game 2.0%
Materials 2.0%

IT 3.8%Construction & real estate

Service Toyo Sangyo
 Yokogawa Solution Service
 NEC Facilities, etc.

4.5%

 GRANVISTA Hotels & Resorts(100% subsidiary of sponsor)

55.5%

14.8%

Others 1.7%

Pharmaceuticals
8.2%
 Bayer Yakuhin, etc.

12.2%

Hotel

5 years or more, butless than 10 years

Percentage by Business Type

Percentage by Business TypeTransportation & communications 2.3%
Wholesale & retail 3.3%

14.6%
3 years or more, butless than 5 years

44.9%

Food
 NH Foods, etc.

Manufacturing

9.1%

73.6%

General electrical appliance manufacturers
and electronics manufacturers
 Hitachi
 Sony Group, etc.

50

SANKEI REAL ESTATE Inc.

Top End Tenants by Leased Area (as of February 28, 2022)

Business type

Total leased
area
(m²)

% of
portfolio’s
total leased
area

Hitachi, Ltd.

Manufacturing(general electricalappliances)

26,513.3

26.23%

Hitachi Kyusyu Building

Sony Group Corporation

Manufacturing(general electricalappliances)Not
disclosed*1

Not
disclosed

Shinagawa Seaside TS Tower*2

Hotels15,166.7

15.01%

Hotel Intergate Tokyo Kyobashi
Hotel Intergate Hiroshima

NH Foods Ltd.

Manufacturing(food)

Not
disclosed

Not
disclosed

BREEZÉ TOWER

Bayer Yakuhin, Ltd.

Manufacturing(pharmaceutical)

Not
disclosed

Not
disclosed

BREEZÉ TOWER

Konoike Construction Co., Ltd.

Construction

2,542.7

2.52%

S-GATE NIHONBASHI-HONCHO

Hakuhodo DY Holdings Inc.

Services(advertising)

2,517.7

2.49%

S-GATE AKASAKA

Toyo Sangyo Co., Ltd.

Services(equipment maintenance)

1,509.7

1.49%

Omori Park Building

Yokogawa Solution Service Corporation

Services(equipment maintenance)Not
disclosed

Not
disclosed

BREEZÉ TOWER

Retail (food)

1,159.7

1.15%

Miyazakidai Garden Office

Name of end tenant

GRANVISTA Hotels & Resorts Co., Ltd.

Ryochi Keiei

Property name

*1 The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not been obtained from the tenant, relevant party,
etc. or information from which confidential information can be derived.
*2 An agreement was reached with Sony Group Corporation for the termination of contracts for Shinagawa Seaside TS Tower on March 31, 2022 (7 floors) and March 31, 2023 (14 floors). Of theseterminations, a cancellation penalty was received for the termination of 7 floors with a termination date of March 31, 2022.
*3 “Total leased area” is rounded to one decimal place.

51

SANKEI REAL ESTATE Inc.

Profile of the Asset Management Company
Trade name

Sankei Building Asset Management Co., Ltd.

Established

April 13, 2018

CapitalShareholder composition
Main line of businessDirectors and auditors

5 directors
1 auditor

100 million yen

Financial instruments
business registration

Director-General of the Kanto Local Finance Bureau Registration(FIBO) No. 3094

The Sankei Building Co., Ltd. 100%

Real estate brokerage
licenseGovernor of Tokyo License (1) No. 102209

Investment management business, investment advisory andagency business, type II financial instruments business

Discretionary transaction
agency, etc. approval

Minister of Land, Infrastructure, Transport and Tourism ApprovalNo. 125

General Meeting of Shareholders
AuditorBoard of Directors
Investment Committee

Compliance Committee
President and CEO

Internal Audit OfficeCompliance OfficeSustainability Promotion Office

Investment Management Department
SANKEI REAL ESTATE Inc.
・Investment policy planning・Acquisition and sale of assets undermanagement
・Operation and management ofassets under management

Finance & IR Department

・Corporate planning, accounting
and general affairs
・Financials and IR

Fund Management Department
Private equity real estate funds, etc.
・Investment policy planning・Acquisition and sale of assets
under management
・Operation and management ofassets under management

52

SANKEI REAL ESTATE Inc.

Notes
Unless otherwise specified, the figures in this document are rounded down to the nearest unit and percentages are rounded to one decimal place.
Page 3
1. “Asset size” refers to the total acquisition price(*). The same applies below.
(*) “Acquisition price” is shown as the transaction price of real estate and trust beneficiary rights shown on the transaction agreement pertaining to each of the acquired assets. The transaction prices do not include consumption taxes,
local consumption taxes or expenses required for acquisition. The same applies below.
2. “BELS”, the Building-Housing Energy-efficiency Labeling System, is a third-party evaluation system that evaluates energy-saving performance of buildings based on evaluation standards set by the Ministry of Land, Infrastructure,
Transport and Tourism. The same applies below.
3. “Portfolio matrix” is the balance and distribution of areas and yield, etc. in the overall assets acquired by SANKEI REAL ESTATE. The same applies below.
4. “TCFD” refers to the “Task Force on Climate-Related Financial Disclosures” established by the Financial Stability Board at the request of G20 to consider how to perform climate-related disclosure and responses by financial
institutions.
Page 5
1. “Distributions in excess of earnings” were 7,136,000 yen as a refund of contribution that falls under distribution through the reduction in unitholders’ capital for tax purposes and excess of earnings per unit were 20 yen due to adecrease in net profit resulting from the recording of temporary borrowing-related expenses associated with the implementation of borrowing for the acquisition of real estate trust beneficiary rights of 4 properties on September 2,
2021. This distributions in excess of earnings is based on the policy on cash distribution in excess of earnings specified in Article 36, Paragraph 2 of the articles of incorporation of SANKEI REAL ESTATE.
Page 9
1. “Sponsor support rate” is the percentage (on an acquisition price basis) of sponsor-owned properties or those acquired by using sales information on properties owned by third parties provided based on a sponsor support agreement.
The same applies below.
2. Shinagawa Seaside TS Tower is 50% quasi co-ownership interest in sectional ownership of the building, etc. and S-GATE AKASAKA is 80% quasi co-ownership interest.
3. The Asset Management Company has concluded a sponsor support agreement with the sponsor for receiving support providing sale information on properties and various other types of support. Based on the state of discussions
between the Asset Management Company and the sponsor assuming the sponsor support agreement, SANKEI REAL ESTATE aims to continue to further expand its asset size and has set a mid-term asset size target of 200 billion yen to
300 billion yen (the Asset Management Company set the target internally on June 14, 2019, based on internal discussions). However, the mid-term asset size target above is solely a target, and neither the achievement of the target
nor the timing of achievement are definite or guaranteed. Furthermore, the timing of achievement of the targets may be delayed due to changes in the investment environment, real estate market conditions, etc. and other reasons.
Page 12
1. “During normal operation” (also referred to as “the level of normal operation”) refers to the level at the time of stable operations rather than the temporary level immediately after commencement of operations by SANKEI REALESTATE. The same applies below.
Page 13
1. The actual values of NAV per unit in each period are calculated as follows.
Actual value of NAV per unit = Net assets per unit (*1) at end of each FP + Unrealized gain (loss) at end of each FP (*2) / Number of investment units issued and outstanding at end of each FP (*3)(*1) “Net assets per unit” is obtained using the following formula. This is simply shown as “Net assets” in the graph. The same applies below.
Net assets per unit = Net assets at end of each FP (after deducting distributions at the end of each FP) / Number of investment units issued and outstanding at end of each FP(*2) “Unrealized gain (loss) at end of each FP” is obtained using the following formula. It is referred to as “unrealized gain” if the result is positive and “unrealized loss” if negative. This is simply shown as “Unrealized gain” or“Unrealized loss” in the graph.
Unrealized gain (loss) at end of each FP = Total appraisal value of assets held by SANKEI REAL ESTATE at end of each FP - Total book value of assets owned by SANKEI REAL ESTATE at end of each FP(*3) “Number of investment units issued and outstanding at end of each FP” is the number of investment units issued and outstanding at the end of each fiscal period.
2. Average annual growth rate is shown as the annualized value of the rate of increase from the NAV per unit of 108,184 yen for the fiscal period ended August 31, 2019 (1st FP) to the NAV per unit of 123,268 yen for the fiscal period
ended February 28, 2022 (6th FP).
3. The figures shown on this page are rounded to the nearest unit and percentages are rounded to one decimal place.
Page 16■ (Left figure) Acquired assets
1. “Acquisition price” is shown as the transaction price of trust beneficiary rights shown on the transaction agreement pertaining to each of the acquired assets. The transaction prices do not include consumption taxes, local
consumption taxes or expenses required for acquisition.
2. “Appraisal value at time of acquisition” is shown as the appraisal value shown on each real estate appraisal report as of July 1, 2021. The appraisal of acquired assets is entrusted to The Tanizawa Sōgō Appraisal Co., Ltd. and Japan Real
Estate Institute.
3. “Appraisal NOI yield” is the ratio of the net operating income derived by the direct capitalization method shown on the real estate appraisal report against the acquisition price. The same applies below.
4. “Occupancy rate” indicates the percentage of the total leased area (*2) against the total leasable area (*1) of each of the acquired assets as of each base date, rounded to one decimal place.
(*1) “Total leasable area” is the total area believed to be leasable (not including area for storage facilities, billboards, parking areas, etc.) based on lease agreements or building drawings, etc. pertaining to each of the acquired assets asof each date shown.
(*2) “Total leased area” is the total leased area (not including area for storage facilities, billboards, parking areas, etc.) shown in lease agreements for the building pertaining to each of the acquired assets as of each date shown(excluding, however, lease agreements for which the lease period has not commenced). For the portion covered by a pass-through master lease, this is the total of the area for which a lease agreement has actually been concluded
with an end tenant for said portion, and the lease period has commenced.
5. The acquisition price and appraisal value of Shinagawa Seaside TS Tower and S-GATE AKASAKA are shown as the values equivalent to the quasi-co-ownership interest in sectional ownership of the building, etc. for each property
acquired by SANKEI REAL ESTATE (25% and 20%,respectively (*)).
(*) 25% quasi co-ownership interest in trust beneficiary rights that have the co-ownership interest in sectional ownership of the office portion of the building and sectional ownership of the parking area portion of the building, and theright to use the grounds for these (ownership and right to mutual use of the grounds) as the trust assets has already been acquired for Shinagawa Seaside TS Tower, and an additional acquisition of 25% quasi co-ownership interestin the trust beneficiary rights has been made. Furthermore, 60% quasi co-ownership interest in trust beneficiary rights with the land and building as trust assets has already been acquired for S-GATE AKASAKA, and an additional
acquisition of 20% quasi co-ownership interest in the trust beneficiary rights has been made.

53

SANKEI REAL ESTATE Inc.

Notes
■ (Right table) Change in the portfolio after the 4 properties were acquired
1. “Acquisition price per property” is the figure obtained by dividing the asset size (on acquisition price basis) by the number of properties.
2. “Average appraisal NOI yield” is the weighted average based on the acquisition price of the ratio of net operating income derived by direct capitalization method stated in the real estate appraisal report of each property against theacquisition price, with the appraisal date of August 31, 2021, for “before acquisition” and July 1, 2021, for “acquired assets.”
3. “Occupancy rate” indicates the percentage of total leased area against total leasable area as of August 31, 2021, for “before acquisition” and July 1, 2021, for “acquired assets.”
Page 17
1. “Portfolio matrix” is the balance and distribution of areas and yield, etc. in the overall assets acquired by SANKEI REAL ESTATE. The same applies below.
2. “Cap Rate” is the appraisal NOI yield, which is the ratio of net operating income derived by direct capitalization method stated in the real estate appraisal report of each property against the acquisition price, with the appraisal date ofAugust 31, 2021, for assets before acquisition and July 1, 2021, for acquired assets, rounded to one decimal place.
3. “Greater Tokyo” refers to the prefectures of Tokyo, Kanagawa, Saitama and Chiba. The same applies below.
4. “Core cities” refers to cities with a population of 200,000 or more (excluding those in Greater Tokyo, Osaka City, Nagoya City and other ordinance-designated cities).
5. “Major regional cities” refer to municipalities with a population of less than 200,000 that are deemed by the Asset Management Company to have a certain level of demand for specific applications.
6. “Typical floorplate” is a typical floor plan in mid- to high-rise buildings. The same applies below.
7. “Actual NOI yield” refers to the actual NOI yield of all assets held at each point in time calculated using the following formula for assets after acquisition. The same applies below.
Actual NOI yield (*) = Actual NOI (annualized) / acquisition price(*) As some fixed asset taxes on acquired assets have not been expensed in the fiscal period ended August 2019, the fiscal period ended February 2020, the fiscal period ended February 2021 and the fiscal period ended February2022, the level during normal operation is shown after adjustment being made assuming these are expensed.
8. “Investment ratio by geographic area” states the percentage in terms of acquisition price, after categorizing overall assets acquired by SANKEI REAL ESTATE by geographic area.
9. “Investment ratio by asset” states the percentage in terms of acquisition price, after categorizing overall assets acquired by SANKEI REAL ESTATE into office buildings and those other than office buildings.
Page 18■ (Left graph) Results of a questionnaire survey
1. “Results of questionnaire survey” ranks “Items emphasized as conditions of buildings that are relocation destinations (nationwide)” in descending order from the results of a CBRE questionnaire survey (survey date: October 2020) of
personnel mainly involved in office strategy in companies with locations in Japan (150 valid responses).
2. “BCP” is an abbreviation for business continuity plan.
■ (Right figure) Satisfaction with SANKEI REAL ESTATE’s properties compared with the results of the questionnaire survey (for office buildings)
1. “Satisfaction with SANKEI REAL ESTATE’s properties compared with the results of the questionnaire survey (for office buildings)” is a list categorized according to the criteria specified by the Asset Management Company forsatisfaction with the overall assets acquired by SANKEI REAL ESTATE as of the date of this document with regard to the main items in the survey results for “Items emphasized as conditions of buildings that are relocation destinations(nationwide)” (transportation convenience, cost, location, comfort (satisfaction is “air conditioned”) and building security).
2. “In the Miki Shoji Business District” refers to the district designated as a business district by Miki Shoji Co., Ltd., designating Chiyoda-ku, Chuo-ku, Minato-ku, Shinjuku-ku and Shibuya-ku in Tokyo, the Umeda area, theMinamimorimachi area, the Yodoyabashi/Honmachi area, the Semba area, the Shinsaibashi/Namba area and the Shin-Osaka area in Osaka, the Akasaka/Daimyo area, the Tenjin area, the Yakuin/Watanabedori area, theGion/Gofukumachi area, the Hakata Ekimae area and the Hakata Ekihigashi/Eikiminami area in Fukuoka as business districts.
Page 20
1. “Office building (main asset) development properties” refers to those developed or scheduled to be developed by Sankei Building, special purpose companies or specified purpose companies in which Sankei Building invests through asilent partnership, preferred equity investment or other means, and affiliates of Sankei Building, and include those sold to SANKEI REAL ESTATE.
2. The development plans shown in the sub asset development properties are those targeted or planned by Sankei Building and may be changed or cancelled in the future. SANKEI REAL ESTATE does not provide any assurances orpromises that the plans will be realized.
Page 22■ Change in Portfolio’s Actual NOI Yield and Office Buildings Average Rent Unit Price
1. Office Buildings Average Rent is calculated using “Rental and CAM revenue upon the most recent settlement / 6 months / Leasable area x Occupancy rate.”
2. As some fixed asset taxes on acquired assets have not been expensed in the fiscal period ended August 2019, the fiscal period ended February 2020, the fiscal period ended February 2021 and the fiscal period ended February 2022,
the level of actual NOI yield during normal operation is shown after adjustment being made assuming these are expensed.

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Notes
Page 23■ (Top graph) Rent Revision Performance of Office Buildings (Based on Rental Area)
1. Of the assets acquired by SANKEI REAL ESTATE as of the end of each fiscal period, applies to properties classified under “Office Buildings” (12 properties in the fiscal period ended February 2022: Tokyo Sankei Building (2% coownership interest), BREEZÉ TOWER (45% quasi co-ownership interest in sectional ownership of the office portion of the building, etc.), S-GATE NIHONBASHI-HONCHO (51% co-ownership interest), S-GATE AKIHABARA, Hibiya Sankei
Building, Hatchobori Sankei Building, Toyo Park Building, Shinagawa Seaside TS Tower (50% quasi co-ownership interest in sectional ownership of the building, etc.), Omori Park Building, S-GATE AKASAKA (80% quasi co-ownershipinterest), Miyazakidai Garden Office and Hitachi Kyusyu Building). For example, for the fiscal period ended February 2022, in the 14 applicable properties, those with rent revision under lease agreements occurring in the period from
September 1, 2021, until February 28, 2022 (limited to those for which a lease agreement was concluded or renewed during the relevant period) applied to 11 tenants with a total of 1,725 tsubos in area (rounded to the nearest unit).
Assuming the revised area is 100%, on a leased area basis, monthly rent was increased in 65.8%, renewed at the same level (maintained) in 34.1% and reduced in 0.1% (*).
(*) Changes in floor space were treated as being maintained if there was no change in the current rent per unit.
2. “Rate of increase” refers to the figure calculated by dividing the difference between the total monthly rent after renewal and the total monthly rent before renewal by the total monthly rent before renewal for lease agreements
renewed during each period (for example, from September 1, 2021 to February 28, 2022 for the period ended February 2022), with increased rent (calculated for renewal with rent revision/renewal of agreements with existing
tenants; limited to lease agreements concluded or renewed during the relevant period).
Page 25■ (Top graph) Scheduled renewal with rent revision/renewal and progress (targeting office buildings)
1. Applies to lease agreements concluded in the period from September 1, 2021, to February 28, 2022, stating the area subject to renewal with rent revision/renewal in the fiscal period ending August 2022 (7th FP) and the fiscal period
ending February 2023 (8th FP). The percentage of total leased area after acquisition is shown.
2. The leased area of the office buildings subject to “contract revision/renewal planned area” is the figure corresponding to the ownership interest acquired by SANKEI REAL ESTATE in each property.
3. “Ratio to total leased area” is the value calculated by dividing the total contract revision/renewal (planned) area for each contract revision/ renewal period by the total leased area for each period.
4. “Progress rate” is the value calculated by dividing the total leased area for lease contracts that have been concluded as February 28, 2022, and whose revision/renewal has been completed by the contract revision/renewal (planned)
area for each contract revision/renewal period, rounded to one decimal place.
■ (Bottom graph) Change in rent gap for office buildings
1. “Rent Gap” refers to the figure arrived at when the amount of difference between the average rent for SANKEI REAL ESTATE’s office building portfolio (*1) and the market rent (*2) is divided by the market rent. SANKEI REAL ESTATE
believes there is room for negotiation with tenants to increase rent when revising rent if this figure is negative. This applies to the assets acquired by SANKEI REAL ESTATE as of the end of each fiscal period that are categorized as“Office Buildings.”(*1) “Average rent of the office building portfolio” is calculated using the weighted average, based on leased area, of the total amount of monthly rent specified in lease agreements concluded as of the end of each period, for the officebuilding portfolio* (Including CAM. Furthermore, it does not take into consideration free rent and rent holidays as of the same day and is based on the rent as of the end of each period, if there is an agreement to change rent in the
future. Furthermore, if agreements with tenants include variable rent, calculation is made without taking into consideration variable rent. Consumption tax, etc. is not included).
(*2) “Market rent” is calculated using the weighted average, based on leased area, of the total median value of assumed new contract rent (typical floorplate) (including CAM) as of March 2022 for office buildings subject to rent gap
calculation within the acquired assets of SANKEI REAL ESTATE shown in the market report prepared by CBRE. Market rent is assessed by CBRE using its own methodology assuming the conclusion of new contracts with new tenants
as of March 2022 based on information collected by CBRE, and the objectivity of the assessment, and the validity and accuracy of the assessment content are not guaranteed. In particular, actual new contract rent fluctuates due tofactors such as whether it is a new tenant or a rent revision with an existing tenant, the timing of the rent revision, the timing of moving in, the contract area and the region, and for this reason the rent in the CBRE-assessed rent
may not be realized. Furthermore, the amount and level of actual new contract rent for office building portfolio are not guaranteed, and there are no assurances or promises that the rent increases equivalent to the “rent gap” will
be made.
Page 26■ (Bottom right figure) Asking rent in the Kita-Shinagawa/Higashi-Shinagawa area
1. “Asking rent in the Kita-Shinagawa/Higashi-Shinagawa area” is indicated as an index of the average asking rent (*1) in for-rent office buildings in each area in Shinagawa-ku and Ota-ku, with the average asking rent of large-scalebuildings (*2) as of January 31, 2020, as 100, and also as a comparison of the central 5 wards of Tokyo (Chiyoda-ku, Minato-ku, Chuo-ku, Shinjuku-ku and Shibuya-ku) and the 23 wards of Tokyo.
(*1) “Average asking rent” refers to the average figure of asking rents obtained by Sanko Estate Co., Ltd., and includes CAM. The same applies below.
(*2) “Large-scale buildings” in this diagram shows buildings that have a maximum room area on the office floor of the typical floorplate (3rd floor or higher) of 200 tsubos or more. The same applies below.
2. Each area is based on the categories specified by Sanko Estate Co., Ltd.
Page 29■ (Top left figure) Financing Highlights
1. “Balance of interest-bearing liabilities” shows the figure as of March 14, 2022.
2. “Ratio of long-term debt” is the ratio of the balance of the long-term interest-bearing debt (not including the current portion) included in the balance of interest-bearing liabilities as of March 14, 2022.
3. “Average financing interest rate” is calculated using the weighted average, based the balance of interest-bearing debt, of the anticipated applicable interest rate of each interest-bearing liability as of March 14, 2022. Calculations areon an interest payable basis and do not include arrangement fee and other borrowing related expenses.
4. “LTV” is the balance of interest-bearing liabilities divided by the amount of total assets and multiplied by 100, rounded to one decimal place. The figures at the end of the 7th fiscal period and the end of the 8th fiscal period at thebottom are forecasts.
5. “Ratio of fixed interest rate” refers to the ratio of the balance of interest-bearing liabilities with fixed interest included in the balance of interest-bearing liabilities as of March 14, 2022.
6. “Average remaining time to maturity” refers to the period determined by the weighted average, based on the balance of each interest-bearing liability, of the period until the repayment date or redemption date of each interestbearing liability on March 14, 2022.
■ (Middle left figure) Distribution map of average financing interest rates and average remaining time to maturity of office J-REITs
1. “J-REIT” refers to a listed real estate investment corporation, and “Office J-REITs” refer to J-REITs with an office buildings rate (*) exceeding 50% in the portfolio of each investment corporation at the end of the most recent fiscal
period as of March 31, 2022.
(*) “Office buildings rate” is the percentage (on acquisition price basis) of “office buildings” included in an investment corporation’s entire portfolio. The same applies below.

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Notes
2. Uses the figures for the most recent fiscal period of “Office J-REITs” as of March 31, 2022.
3. The dotted lines in the graphs are straight lines approximating the relationships between “average financing interest rate” and “average remaining time to maturity” for Office J-REITs that are statistically calculated to minimize thesum of the error (distance between the anticipated line and the coordinates of the distribution) using the least-squares method.
Page 30
1. “Global Index” is an index used globally by institutional investors in Japan and abroad as a benchmark for investment in equities, etc.
2. “Analyst coverage” refers to analysts of securities companies and research institutions (a list if multiple) that analyze the performance, etc. of SANKEI REAL ESTATE, and recommend or review the Company’s shares.
3. “AIFMD Article 8 (SFDR)” refers to one of the specific measures in the “clarifying institutional investors and asset managers duties” which is one of the ten actions in the “Action Plan: Financing Sustainable Growth” published in the EU
by the European Commission in 2018.
■ (Bottom figure) Maturity ladder
1. “Maturity ladder” refers to a diagram that aggregates the amounts of each interest-bearing liability for a certain period by maturity date and lists these in order of time.
Page 32
1. “GRESB” is the name of an annual benchmark assessment measuring consideration for the environment, society and governance (ESG) in real estate companies and funds, and the organization that manages this. It was founded in2009 by a group of major European pension funds leading the Principles for Responsible Investment (PRI). There are currently 140 investor members utilizing GRESB data in the selection of investment targets and dialogue withinvestment targets, and several institutions in Japan, including the Government Pension Investment Fund (GPIF) use GRESB assessment results. 1,520 listed and unlisted real estate companies and funds participated in the 2021 GRESBReal Estate Assessment assessing real estate companies and funds.
2. “GRESB Rating” “3 Star” and “Green Star” were obtained in the GRESB real estate assessment conducted in 2021.
Page 33■ Environment
1. “DBJ Green Building certification” is a certification system established by Development Bank of Japan Inc. in April 2011 to support properties that give proper care to the environment and society (Green Buildings). It evaluates andcertifies properties required by society and the economy based on comprehensive evaluation including the environmental performance of the properties in addition to responses to various stakeholders including consideration fordisaster prevention and the community and supports the initiatives they take.
2. “DBJ Green Building Certification” was obtained by The Sankei Building Co., Ltd. for Tokyo Sankei Building and BREEZÉ TOWER.
Page 45 Page 46
1. Entries with multiple “acquisition dates” indicate additional acquisitions of interest.
2. “PML value” refers to the probable maximum loss ratio in earthquake risk analysis, which is represented by the percentage of the probable maximum loss in relation to the replacement cost (value in the event of reconstructing thebuilding) in the event of the largest anticipated earthquake during the period of use of the building), PML = probable maximum loss / replacement cost x 100).
The same applies below.
Page 49
1. “Percentage by Walking Time to the Nearest Station” is the percentage, based on acquisition price, of assets held after classifying them by the number of minutes required to walk from the nearest station assuming that it takes one
minute to travel a road distance of 80 meters, and the average is the weighted average based on acquisition price of each property of the calculated figures, rounded to one decimal place.
2. “Percentage by Building Age” is the percentage, based on acquisition price, of assets held after classifying them by building age as of February 28, 2022, and the average is the weighted average, based on acquisition price of each
property, of the calculated figures, rounded to one decimal place.
3. “Percentage by Typical Floorplate (Office Buildings)” is the percentage, based on acquisition price, of assets held of which use is office buildings after classifying them by typical floorplate, and the average is the weighted average,
based on acquisition price of each property, of the calculated figures, rounded to one decimal place.
Page 50
1. “Percentage by Contract Form” is the percentage of assets held based on leased area, rounded to one decimal place.
2. “Percentage by Lease Period” is the percentage of assets held classified into “including hotels” and “excluding hotels,” based on leased area, rounded to one decimal place. The average is the weighted average based on leased area of
each property of the calculated figures, rounded to one decimal place.
3. “Percentage by Business Type” is the percentage of assets held classified by tenant business type based on leased area, rounded to one decimal place.
4. “Percentage by Business Type (Manufacturing)” is the percentage of assets held classified by tenant business type within manufacturing based on leased area, rounded to one decimal place.
5. The leased area for properties leased through a master lessee is calculated using the areas stated in the lease agreements concluded with end tenants as the areas leased to the end tenants.
Page 51
1. “Total leased area” and “% of portfolio’s total leased area” are based on figures after considering SANKEI REAL ESTATE’s ownership interest.
2. “% of portfolio’s total leased area” refers to the total leased area expressed as a percentage of the entire portfolio’s total leased area, rounded to one decimal place.
3. “Total leased area” and “% of portfolio’s total leased area” for properties leased through a master lessee are calculated using the areas stated in the lease agreements concluded with end tenants as the areas leased to the end
tenants

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